How does this stand in comparison with the old law?
SECTION 85.
Question proposed : " That Section 85 stand part of the Bill ".
This is entirely new.
That is what I thought.
It is recommended by the Company Law Committee.
There seems to be some peculiar words here—" shall be deemed to be certificated ". Surely the word is " certify ".
No, not quite. Is not a certificated instrument the certificate of certification ?
If it is a new word for definition let us know what exactly it means. It is a new word and I do not think it is defined. Certification is a perfectly good word, but is " certificated " ? It does bring up also the question of what documents of title a company will have before it transfers its shares, does it not ? Does not this section in effect throw back on the company an investigation of title ?
No. Surely that is excluded in subsection (1)—" not as a representation that the transferor has any title to the shares. . . .
Subsection (1) says: " that there have been produced to the company such documents as on the face of them show a prima facie title to the shares or debentures in the transferor named in the instrument of transfer, but not as a representation that the transferor has any title”—“prima facie title to the shares or debentures ”. What does that mean?
Surely it is that what the company is saying is that they are satisfied that there is a prima facie title but they do not give a certificate as to the title. All they can say is that the company believes.
I think what is really intended is that the company certifies that the person who is the transferor is in fact entitled according to the books of the company—in other words that he has been there before—but it does not say whether he has any equitable or legal title to the shares. What is intended is that the title to be shown or certified is that, at the date of the transfer, the transferor was entitled on the books of the company and the deed produced was by a person who was entitled to the share in the register on the face of the register, but it is no warranty as to his title to be so registered.
As I understand the situation, this is intended to cover the case where—we will take a rich man at the table — Deputy Booth has £1,000 of Guinness stock. He sells £500 of that and he lodges the certificate for £1,000 with the company to meet the transfer of the £500 he has sold. At the same time, he also lodges, or subsequently, if he wishes, another transfer to X of another £500 and, instead of the company having to go to the expense of issuing an intermediate certificate to him for the £500 that he is going to sell next week, the company stamp his transfer "certified" and that certificate is to count exactly the same as if he had got a share certificate in the intervening period. That is my understanding of the meaning of the section.
It is clarified by paragraphs 85 and 86 of the Company Law Report.
That is right. Deputy Sweetman's interpretation is quite correct.
Would the Minister say in regard to the last provision in the section, subsection (3) (c) (ii) is he satisfied that that says what it is meant to say. There seems to be something very close to a double negative in it: " it is not shown that the signature or initials was or were placed there neither by himself nor by any person ". If the Minister is satisfied I am satisfied.
I understand it was a difficult piece of drafting, but I am satisfied that it achieves its purpose.
In other words, if you see initials there you are entitled to assume that they are genuine. Is that right ?
That is right, unless——
——Unless you have evidence to the contrary.
I am still not completely in agreement with what you want to do under subsection (1). It is the wording I am not completely happy about. I have no quarrel with the intent.
Deputy de Valera can have another look at it, before the next stage.
Question put and agreed to.