This is Section 70 of the Act of 1908.
SECTION 143.
Question proposed : " That Section 143 stand part of the Bill."
Any change?
Not of any substance I think.
Except that we have the question we raised earlier, the question of printing.
Yes, we dealt with that before.
On Section 143, is it now clear that you can have a special resolution without a meeting ? In other words, you can have a special resolution signed by all the shareholders of the company without their being in the place at the one time ?
That is subsection (5) (b).
As I understand it, the present position is that, even though all the shareholders unanimously want a certain change carried through, there has to be a special resolution. They cannot individually sign a resolution to that effect. They must meet in the one room, or a sufficient number of them must meet with proxies. Otherwise, the resolution is not effective.
Even where the articles so provide?
So I understand. There is some doubt about it. It is not the case in relation to a direct decision of the directors, but it is the case in relation to, shall we say, the general operations of the company—to avoid using the word " meetings ". I would suggest it is desirable that if all the shareholders unanimously want to do something and sign a resolution to show their unanimity, it should not be necessary to get them all together in one room for the purpose.
That is a point we considered at some length a couple of years ago. There are a number of court cases which are held as giving authority for the passing of resolutions by agreement amongst the members of the company and not necessarily at meetings. But the Jenkins Committee have referred to the fact that there is still some doubt about it. They recommended that a specific provision be put into the British law to the effect that, where all the members agree, you do not have to have a meeting. As I said, we considered that some years ago. We were aware about these doubts, but we were disinclined to put a provison of that kind into the Bill, because the idea of holding meetings has always been regarded as fundamental in company administration. I think it would not be desirable that the Act should be so drafted as to hold out as a model this idea that you can have resolutions without a meeting. The fact appears to be that for most purposes you can apparently resort to that system of coming to a decision but we would prefer not to put it in statute law.
I am informed by —no names, no pack-drill—the person I consider the best junior at the Bar dealing with company law that, in his opinion, it is not permissible under this Bill for a private company with five members to pass a special resolution by all signing that resolution. They must meet and provide a quorum to do it at a particular meeting. It is certainly undesirable that that should be necessary in relation to a private company, whatever about a public company. In public companies, there are so many shareholders that you cannot get unanimity, but in a private company, it seems to me unnecessary red tape to provide that they should all come together. I would ask the Minister to consider the point and to provide for the Committee a draft by which it would be permissible for private companies in their articles of association to provide for special resolutions in that manner.
I am advised there is one danger in this, that a resolution could be back-dated by this procedure and that could have some serious consequences. However, I think the point made by Deputy Sweetman is a good one and that I ought to look at it to see if I can make it permissive to have meetings in such a way by private companies.
Subsection (1) says that the Registrar of Companies must get a printed copy of every resolution or agreement to which this section applies. Subsection (2) says the reply from a private company need not necessarily be a printed copy. Is it considered desirable that a printed copy should be insisted on, even in subsection (1), when there are so many new methods of printing or corroboration of original documents? Printing is now regarded as the slowest possible method of conveying a decision. You can have a decision through copying machines.
We dealt with that at length on the section dealing with articles of association. I agreed to look into it. I think what we want to do is to provide that these copies should be in readable and durable form.
Will that apply to Section 143?
It would apply to all printed copies.
Question put and agreed to.
SECTION 144.
Question proposed: " That Section 144 stand part of the Bill."
This is a new section recommended by the Committee in paragraph 129 of their Report. There is at present some doubt as to the date on which resolutions passed at an adjourned meeting are in law regarded as having been passed. This section clarifies that point by providing that resolutions are deemed to have been passed on the actual day on which they were in fact passed.
The second day, in other words.
Question put and agreed to.