Is this an exact restatement ?
SECTION 33.
Question proposed: " That Section 33 stand part of the Bill. "
There is one new part of it, in subsection (1), on the second line where it reads " which has a share capital ". That is new.
What is the point ?
On a number of occasions in the past, a number of companies not having share capital have sought to be registered as private companies.
This is shares of no par value ?
No, full-blooded shares.
But not issued ?
It was never the intention that companies not having share capital should be eligible for registration as private companies.
Have they been registered up to now or was there an effort made to have them registered ?
Efforts have been made and the contention was that they were entitled to be registered.
How could that be done ? Were they a type of charitable organisation ?
I am intrigued. How do you have a company without share capital ?
I do not think you can.
Apparently you can. My ingenuity never got around to it.
A company limited by guarantee.
Surely a company limited by guarantee is a private company ?
No. If it has share capital and has in its articles the clause at paragraphs (a), (b) and (c), then it may register as a private company but a company limited by guarantee which has not got a share capital but which purports to put those paragraphs (a), (b) and (c) into its articles is really resorting to a stratagem to get the right to register as a private company and the object of these new words is to prevent that.
I do not see what the point of that company registering is at all.
There were quite a number of them.
What is the purpose of it ?
Because they might want to have secrecy about their accounts. If they are a public company they have to file their accounts with the registrar. If they are a private company, they do not have to, but it is most desirable, bearing in mind the type of activity normally conducted by guarantee companies, that they should not be private companies and that their accounts should be filed for public inspection.
Has that been the position heretofore ?
The words are new.
Hitherto what has been the position of companies limited by guarantee ?
They should be public companies. There were a number of instances where people came to the registrar and said: " We have these in our articles and we want to be registered as private companies " but he did not accept them.
It has become very much more common in recent years for religious bodies to form companies limited by guarantee in order to avoid the necessity for new deeds when a missionary is sent to China or something like that. They are usually companies limited by guarantee but I would not be too sure that they all are and I cannot see any objection to them being left that way.
In the evidence submitted to the Jenkins Committee, it was suggested that this matter should be settled. A list of minor points was sent by the Committee to the Board of Trade and I would not be surprised to find that in it.
There is not anything about it in our own report ?
The point which Deputy Sweetman raises is a valid one. What is the general pattern of companies limited by guarantee? I know from my own experience of some charities which are limited by guarantee.
We might inquire about this proposed change to see if it would have any undesirable effects.
Would the Minister try to obtain for us a list of the companies limited by guarantee without share capital ? I do not think there would be very many.
I understand our inquiries disclosed there were a number of such companies. The registrar always resisted the efforts of those companies to register as private with paragraphs (a), (b) and (c) in their articles.
If there are no such companies, I would be happy.
No private companies.
I suppose the way to get around it is to issue a few shares.
Then you become liable to various provisions in the Act.
I cannot see any reason why you could not have a share capital but I do not want to disturb the existing practice.
Is the present pattern confined to guaranteed companies without capital or have any of them flown into the commercial sector ? Do I gather from the Minister there were no companies registered without capital ?
There were no private companies registered without share capital. They would not be accepted.
It seems to me to be reasonable to stop that, when we are revising the law.
We are not really stopping a loophole but confirming the registrar who believed he was right.
That is right.
We are not making a change but giving him authority——
Giving him statutory authority for the status quo.
Question put and agreed to.