N.S.W. COMPANY LAW

Dominion, Volume 28, Issue 83, 2 January 1935, Page 12

N.S.W. COMPANY LAW

Drastic Provisions of New Bill Drastic legislation to prevent exploitation of the investing public, and to provide a code under which companies, may be formed, worked, and wound up, was presented to thp New South H ales Parliament on December 19. The Minister for Justice, Mr. Martin, who explained the measure, said the Bill was the outcome of a public demand, which in recent years had become more insistent. It seemed that bad times had given rise to bad practices, and the public had become alarmed at the devices of various persons seeking to evade responsibilities. The Government had one object in view—to give the business community a law which would prove an apt instrument for commercial development.

“The Bill,” added the Minister, “will provide a code under which companies may be formed, worked, and wound up. It will prevent exploitation of the investing public. The English code will be the model, with various provisions from the legislation of Victoria, Queensland, New Zealand, South Australia, and the Commonwealth. Some of these provisions may seem to be drsstic, but there is an insistent demand that the law should be such that, while offering- no terrors to the ordinary honest person, it will restrain those who seek to find, in the company law. a field for exploiting public credulity. To carry out thewe objects, it has been found advisable to provide, not an amendment of the Companies Act, but an entirely new measure, repealing the existing laws, and providing in the one enactment the whole instrument of company legislation.” Mr. Martin said the adoption of Lnglish provisions would stop the reckless issue of prospectuses, but would create no obstacle to a genuine public appeal for capital. Provision would be made that where a company was wound up and proper books of account bad not been kept for a period ot three years immediately preceding the commencement of the winding-un, every director, manager nnd other officer who had known it, or connived at it. would lie guilty of an offence and liable to imprisonment. When an insolvent company was wound up, its affairs would bo closely .‘crutinised. and if wrong had been done by those entrusted with the management of the company’s affairs, that wrong would be punished.

Hawking of Shares. Referring to the hawking of shares, the Minister said the practices adopted by some company promoters had led to widespread public unrest. Ihe provision which had been included to deal with the position was entirely new to Aew South Wales law. "It was largely copied from the English Act, and whether finally adopted in its present or in a modified form, it would have a far-renching effect. It was inserted in the hope that many of the practices in company promotion which had caused so .much pnvale loss would become a thing ot the Mr. Martin added that the Bill would deal with proprietary companies, foreign companies, management and adinimstrntion shares and debentures. In regard to the registration of charges on the assets of a company, the provisions were largely found in the existing law, but the English Act had been called upon to supply certain additional safeguards which had worked satisfactorily and seemed advisThe Government launched the Bill in the firm belief that it would provide a great measure of relief to the public: that it would give added confidence to be formation and development of joint stock companies, and that, it would tend to lessen, if it did not obliterate, most of those practices which had received such severe condemnation from judges and from so many of the public. Mr McKeli expressed satisfaction that at last some attempt was being made to alter the archaic and obsolete company law He «iid that the present method of auditing was simply farcical. borne auditors were more concerned about the interests of the directors than the shareholders.

London Markets The Department of Agriculture has received the following cablegram, dated December 20. from the High Commissioner for New Zealand, Loudon :— Hemp: Manila: Market firm. K grade, January-February-March shipment, quoted buyers £l3/5/-. Sisal: Market firmer. J anuary-February-M a rch sh i pinent sold at £l-1/10/-. February-March-April shipment. £l4/17/6. New Zealand: Market nominally unchanged. Eggs: Market unsettled. Present supply exceeds requirements. Prices have declined. Business interfered with on account of holiday. N.Z. Express Company Dominion Special Service. Auckland, January 1. The Auckland business of the New Zealand Express Company, Limited, has been acquired by a public company registered in Auckland. The New Zealand business of the older company will still be carried on outside the Auckland territory. The Auckland branch will be maintained as nt present. Mr. .1 M. Simson retaining position as manager. The new company, New Zealand Express Company (Auckland), Limited, has a capital of £12,000 in £1 shares.