Companies Act Needs Altering

Sun (Auckland), Volume III, Issue 793, 14 October 1929, Page 11

Companies Act Needs Altering

LAGS BEHIND TIMES CONFERENCE SUGGESTION A desire for legislation to modernise the Companies Act was dealt with in the following remit from the Canterbury Chamber which was presented by ! Mr. A. F. Wright (Christchurch), at the Chambers of Commerce Confer- j ence:— “That the Government be urged to | bring down without delay long promised legislation to modernise the Companies Act, and that particular at- j tention be paid to protection of the | public in respect of new company i flotations.” He said that people did not realise the enormous amount of capital in New Zealand inch was invested in companies. In 1926 -the sum of £115,000,000 was regarded as the nominal capital registered in the Dominion. Since then, however, the amount had largely increased. One of the reasons why the Companies Act should he altered was that the rules had not kept pace with recent legislation regarding business concerns. A species of company had been floated which was not to the good of this country and it was highly desirable that the conference express itself forcibly regarding the modernising of the Act. CHANGES IN ENGLAND Mr. Wright dealt with the work of a commission which sat in England in 1928, and which the following year was responsible for getting an Act passed by the British Government which had made sweeping changes in legislation dealing with the Companies’ Act. In New Zealand there had not been any changes since 1887 in the rules concerning the -winding-up of companies. No provision was made for the public examination of the promoters when a ’company was being wound up. Mr. Wright also referred to what lie called the "evils of sharehawking,” although the Stock Exchange had frequently called attention to it. The manner in which shares were hawked round the country often brought great hardship to investors. Recently too, a number of companies which operated, in New Zealand had been registered in some of tlie Australian States where the Companies’ Act lagged still farther behind.that of the Dominion. The recent Act passed in England prevented this sort of thing from happening. “It is a reproach to our commercial community that the Companies’ Act. was not brought up to date yeaijs ago,” said Mr. Wright. In seconding the remit Mr. C. H. Weston (Taranaki) said that the Government could easily take advantage of the English Act. Mr. D. Seymour (Hamilton) remarked that the North Island had suffered a great deal from the activities of companies which should never have been allowed by law. The remit was carried.