Is the first amendment being taken on its own?
Stock Exchange (Completion of Bargains) Bill, 1977: Committee and Final Stages.
SECTION 1.
Yes, if the Senator so wishes.
I move amendment No. 1:
In page 2, subsection (1), line 20, to delete "The Stock Exchange" and substitute "a recognised stock exchange".
The amendment identifies what the stock exchange is by reference to the Companies Act where any expression used in the Companies Act is the context in which expressions used in this Act are to be seen. Under that Act you can identify the stock exchange because the Minister has recognised it by an order. Without that I think there would be doubt as to what was the stock exchange.
As the Senator's amendment would add to the Bill and perhaps make it somewhat clearer than it is, I propose to accept the amendment.
Amendment agreed to.
Section 1, as amended, agreed to.
Section 2 agreed to.
SECTION 3.
Amendments Nos. 2, 5a and 9 are related and may be taken together.
I move amendment No. 2:
In page 2, subsection (1), line 34, after "company" to insert "other than a private company unless such company be a stock exchange nominee".
Might I propose an amendment at this stage to my amendment by proposing that the amendment to be considered by the House in relation to this should read "other than a private company" deleting the remaining words of the amendment—"unless such a company be a Stock Exchange nominee". I have no explanation to offer for this other than the original wording having been a blunder on my part.
The Chair understands that in regard to amendment No. 2, lines 2 and 3, the words "unless such company be a Stock Exchange nominee" are being deleted.
Amendment amended, by leave.
I have very little to say regarding this amendment except that in general and having regard to the nature of a private company, with the restriction on numbers and on transfers of shares and with the very high proportion of the companies in Ireland that are private companies —according to the latest statistics I have seen, 99.15 per cent of the companies in Ireland are private companies and that is an extraordinarily high proportion—there is an undue amount of carelessness with regard to this matter of ensuring that a private company remains a private company and that the rights of members of a private company are preserved. There are serious losses for members of a private company if they breach the conditions which make the company a private company. Obviously, the amendment would make it right that I should accept the ministerial amendment to section 5. I was not convinced of the necessity of that amendment but I am prepared to accept it.
In addition it follows logically that the provisions of Table A, regulation 8, the regulation applicable to private companies, should be altered accordingly.
Amendment, as amended, agreed to.
Section 3, as amended, agreed to.
SECTION 4.
I move amendment No. 3:
In page 3, subsection (1), line 11, after "record" to insert "other than minute books kept pursuant to section 145 of the Act of 1963".
Obviously, there is no conceivable advancement of knowledge that can keep a minute book by way of a computer. It is possible for a computer to extract from minute books what the directors decided and reversed from time to time but a computer could not keep a minute book.
It was never envisaged that minute books would be kept in computerised form because we would consider that minutes of meetings would be signed by the chairman.
Amendment agreed to.
Amendments Nos. 4 and 4a are related and may be taken together.
I move amendment No. 4:
In page 3, to delete subsection (2) and substitute the following:
"(2) Subsection (1) shall not relieve a company from compliance with
(a) the obligation to keep such books as are necessary to give a true and fair view of the company's affairs and to explain its transactions imposed by section 147 (2) of the Act of 1963;
(b) the obligation to preserve records imposed by section 147 (5) of the Act of 1963;
(c) the obligation with regard to the register of directors' share-holdings imposed by section 190 (2) of the Act of 1963; or
(d) the obligations imposed by any other Statute, statutory instrument or otherwise by law to preserve any other documents relating to any transactions of the company."
Let me explain briefly my position with regard to these amendments and in the context of what I said on Second Stage. I have become satisfied that while official seals should not apply to private companies I am satisfied now also that it is proper that private companies be given an opportunity of keeping computerised registers, computerised accounts. I have found that quite a significant number of private companies are already keeping computerised records of accounts but there would seem to be some doubt as to whether in law they are right in doing so. However, the doubt is being removed by this section.
In moving the deletion of subsection (2) I have to consider the ministerial amendment thereto which is offered to the House in exchange. I am satisfied that subsection (2) should stand because it relates to pre-1963 trust deeds which provide for the register of debentures. Therefore, it is proper that in such cases registers be computerised. That is the convenient method for the company to adopt.
I am satisfied also that the original subsection in the form in which it was would not have been satisfactory and I am happy that the ministerial proposal to amend it meets the difficulty I had in that regard.
In agreeing to withdraw the amendment I am bound to express some residual unhappiness with regard to any possibility that anyone could construe this computerisation effort as relieving officers of companies from the obligations of the Companies Acts. This is probably taken care of by the provisions of subsection (4) which I had proposed to delete.
I should like to give one illustration of the sort of problem involved. There is an obligation on directors to keep records of their directors' share-holdings. It is possible to programme a computer in a way that the card will show what were the directors' shares at the beginning of the year and to show also what were their shares at the end of the year, perhaps showing the same figure on each occasion but without showing what went on during the year. In other words, it is possible to programme a computer in a way that the basic information that is required by the Companies Act is not available. I am satisfied that if the directors programmed a computer in a way that the information would not be provided, they would be in breach of the Companies Act. Consequently, I am withdrawing the amendment.
Amendment, by leave, withdrawn.
Government amendment No. 4a:
In page 3, subsection (2), line 18, after "form" to insert ", provided, however, that a register kept in non-legible form shall be capable of being reproduced in legible form".
Amendment agreed to.
I do not propose to move amendment No. 5 which reads:
in page 3, to delete subsection (4).
Amendment No. 5 not moved.
Section 4, as amended, agreed to.
SECTION 5.
Government amendment No. 5a:
In page 3, subsection (1), line 36, after "company" to insert "(not being a private company)".
Acceptance of Senator FitzGerald's amendment No. 2 necessitates the insertion of the words "(not being a private company)" after "company" in line 36, page 3.
Amendment agreed to.
Amendments Nos. 6, 7, 8 and 11 are cognate and 12 is related to them. These five amendments may be taken together.
I move amendment No. 6:
In page 3, subsection (1), lines 36 and 37, to delete "Stock Exchange (Completion of Bargains) Act, 1977" and substitute "Companies (Amendment) Act, 1977".
I can be very brisk about this. I asked a number of people whether they were aware of what was contained in this Bill and they were horrified to discover that it existed. By accepting my proposed amendments, Nos. 11 and 12, the Bill would become known as the Companies (Amendment) Act, 1977 and damned be he who is not aware of the Companies Act after that. This involves the consequential changes proposed in amendments Nos. 6, 7 and 8.
Amendments Nos. 6, 7, 8, 11 and 12 deal with the Title to the Bill. The acceptance of these amendments would improve the Bill, as has been suggested by the Senator.
Amendment agreed to.
I move amendment No. 7:
In page 3, subsection (2), lines 55 and 56, to delete "Stock Exchange (Completion of Bargains) Act, 1977" and substitute "Companies (Amendment) Act, 1977".
Amendment agreed to.
I move amendment No. 8:
In page 4, subsection 3, line 19, to delete "Acht an Stoc-mhargaidh (Margaí a Chomhlánú), 1977" and substitute "Acht na gCuideachtaí (Leasú), 1977".
Amendment agreed to.
I move amendment No. 9:
In page 4, between lines 21 and 22, to insert the following new subsections:
"(4) The words ‘(with the exception of regulations 24, 51, 54, 84 and 86)' are hereby deleted in regulation 1 of Part II of Table A in the First Schedule to the Act of 1963 and are hereby substituted for by the words ‘(with the exception of regulations 8, 24, 51 84 and 86)'.
(5) The following new regulation is added to the regulations of Part II of Table A in the First Schedule to the Act of 1963:
‘10. Every person whose name is entered as a member in the register shall be entitled without payment to receive within 2 months after allotment or lodgment of a transfer (or within such other period as the conditions of issue shall provide) one certificate for all his shares or several certificates each for one or more of his shares upon payment of 12½ new pence for every certificate after the first or such less sum as the directors shall from time to time determine, so, however, that in respect of a share or shares held jointly by several persons the company shall not be bound to issue more than one certificate, and delivery of a certificate for a share to one of several joint holders shall be sufficient delivery to all such holders. Every certificate shall be under the seal and shall specify the shares to which it relates and the amount paid up thereon.'
(6) The note at the end of Part II of Table A in the First Schedule to the Act of 1963 is hereby deleted and the following is hereby substituted therefor:
‘Note—Regulations 3, 4, 5 and 10 of this Part are alternative to regulations 24, 51, 54 and 8 respectively of Part I. Regulations 7 and 8 of this Part are alternative to regulations 84 and 86 of Part I.'
(7) The words ‘(taobh amuigh de rialacháin 24, 51, 54, 84 agus 86)' are hereby deleted in regulation I of Part II of Tábla A in the First Schedule to the Act of 1963 and are hereby substituted for by the words ‘(taobh amuigh de rialacháin 8, 24, 51, 54, 84 agus 86)'.
(8) The following new regulation is added to the regulations of Part II of Tábla A in the First Schedule to the Act of 1963:
‘10. Gach duine a mbeidh a ainm sa chlár mar chomhalta, beidh teideal aige chun go bhfaighidh sé, gan aon íocaíocht, laistigh de 2 mhí tar éis leithroinnt nó tar éis aistriú a thaisceadh (nó laistigh de cibé tréimhse eile a fhorálfaidh coinníollacha na heisiúna), deimhniú amháin ar a scaireanna go léir nó deimhnithe éagsúla agus gach ceann acu ina dheimhniú ar scair amháin nó níos mó dá chuid, má íocann sé 12½ pingin nua ar gach deimhniú i ndiaidh an chéad cheann nó cibé suim is lú ná sin a chinnfidh na stiúrthóirí ó am go ham, sa dóigh, áfach, nach mbeidh de cheangal ar an gcuideachta, i gcás scair nó scaireanna a shealbhóidh daoine éagsúla i gcomhpháirt, níos mó ná deimhniú amháin a eisiúint, agus go mbeidh seachadadh ar dheimhniú i leith scaire do dhuine amháin de shealbhóirí comhpháirteacha éagsúla ina sheachadadh leormhaith do gach sealbhóir acu sin. Beidh gach deimhniú faoin séala agus sonróidh sé na scaireanna lena mbaineann sé agus an méid a íocadh orthu'.
(9) The Note at the end of Part II of Tábla A in the First Schedule to the Act of 1963 is hereby deleted and the following is hereby substituted therefor:
‘Nóta—Is rialacháin mar mhalairt ar rialacháin 24, 51, 54 agus 8 faoi seach de Chuid I rialacháin 3, 4, 5 agus 10 den Chuid seo. Is rialacháin mar mhalairt ar rialacháin 84 agus 86 de Chuid I rialacháin 7 agus 8 den Chuid seo.'"
Amendment agreed to.
Section 5, as amended, agreed to.
NEW SECTION.
I move amendment No. 10:
In page 4, before section 6, to insert the following new section:
"6.—The following is hereby inserted at the end of subsection (1) of section 2 of the Act of 1963:
‘The word "register" (wherever used in this Act) includes in the case of any company keeping such register a register consisting of reproductions in legible form of entries recorded otherwise than in a legible form.'"
Perhaps I could argue for this amendment by giving a very short account of the stages by which we got to the computer. It was regarded as a major change in our company law when it became possible to keep company records in anything other than bound books which were faithfully transcribed by ill-paid servants of the company and changed either regularly or irregularly. At any rate they were presumed to be changed correctly.
However, it was provided in the Companies Act, 1963, that it was no longer necessary to keep the records in bound books and it became possible for companies to do what many of them were already doing anyway, keeping the records on loose leaves and inserting them whenever convenient and making alterations to them.
Now, we have come to the stage where we have computers that are ready to produce whatever has been fed into them. I find it difficult to make this vast leap forward from the bound book to a locked machine. I would have thought it desirable that there should be identified as the register which contains such vital information to the usefulness of company business, cards which result from a proper input to a machine that has been programmed properly and which should represent the register. I find it difficult to accept, as a state in company law that is desirable that the register is in a machine which for some reason speaketh not and writeth not. This seems tantamount to moving back two stages and saying that the register was the bound book with a creature before it with an ink and a pen but with the scribe refusing to make any entry in the bound book. Until the entry was made in that bound book it was not a properly kept register. In the case of a computer it seems to me that there should not be a register until the cards that are produced are filed properly and are available to the auditors. I am suggesting in aid of the Bill that the register should consist of the reproductions in legible form of what has gone into the computer. There might be some metaphysical argument against that in terms of what we have already agreed to pass, but in terms of practical business it seems to me that the register ought to be identified as a carefully collected together set of reproductions from the machine.
I disagree with the Senator's remarks. I feel that the amendment is based on the Senator's idea that the computer print-out is the register. I feel that the input in the computer is the register and, in fact, the print-out is only a reproduction of the register in legible form. This seems quite clear if we look at the wording of section 4 (1) which refers to keeping the register by recording matters in non-legible form and the wording of section 4 (2) which refers to keeping the register in legible or non-legible form. Again, I could refer to the Companies Act, section 378, which refers to the fact that any register may be kept by making entries in bound books. On this basis I feel the Senator's amendment would be contrary to section 4 and, therefore, I could not accept it.
There is a logic to the position of the Parliamentary Secretary. It must be admitted that the logic stems from the language which I had been cajoled by the Parliamentary Secretary to accept as contained in subsection (1). I am beginning to reject the cajolery because the Parliamentary Secretary has been saying in effect that what is put into the computer is the register. If it be, why put it into the computer? However, in the interest of the harmony which I hope will long prevail between us all I withdraw this amendment.
Amendment, by leave, withdrawn.
Section 6 agreed to.
Sections 7 to 10, inclusive, agreed to.
SECTION 11.
I move amendment No. 11 :
In page 5, subsection (1), lines 21 and 22, to delete "Stock Exchange (Completion of Bargains Act, 1977" and substitute "Companies (Amendment) Act, 1977".
Amendment agreed to.
I move amendment No. 12:
In page 5, between lines 22 and 23, to insert the following new subsection:
"(2) This Act and the Act of 1963 may be cited together as the Companies Acts, 1963 to 1977."
Amendment agreed to.
Section 11, as amended, agreed to.
Title agreed to.
Bill reported with amendments, received for final consideration and passed.