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SECTION 306.
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Special Committee Companies Bill, 1962 debate - Wednesday, 27 Nov 1963
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SECTION 306.
I move amendment No. 4 :
At the end of subsection (1) to add " and a copy of statement shall be available for examination by creditors and shareholders of the company ".
I feel that, though creditors are properly safeguarded, shareholders do not appear to be. I am anxious to have this addition if the Minister would agree. It does not cover inspection.
The purpose of Senator Desmond's amendment is, of course, to make available to the shareholders the statements which the liquidator would be required to make at certain intervals in the case of a liquidation carrying on for a certain time. The section is designed to ensure that in the case of liquidations which take a long time to complete information regarding progress made will be filed at suitable intervals for inspection in the Companies Registration Office. The form to be prescribed will require very comprehensive details about the conduct of the winding up. I think I am correct in suggesting that Senator Desmond's point is already provided for in Section 370. Under Section 370 any member of the public may inspect the documents filed with the registrar on payment of a small fee and that will include this periodic statement which the liquidator will be required to make. I think that provision takes care of the point the Senator wishes to make.
Subsection (2) of Section 370 says :
No process for compelling the production of any document kept by the registrar shall issue from any court except with the leave of that court, and any such process if issued shall bear thereon a statement that it is issued with the leave of the court.
The trouble there is that it would take a considerable time. What I had in mind was that at reasonable intervals the shareholders would have some idea of what was taking place. There are cases where it might go on for years and the shareholders would ask : " What is the actual position of my company now?" I suggest something to cover that.
I think that Section 370 (2) is for the purpose of court proceedings. It does not cover inspection.
It is to deal with certain unusual situations and in no way prevents a member of the public from making an inspection or getting copies.
It should be covered in such a way that at suitable intervals, which the Minister would regard as reasonable, say 6 or 12 months, some information would be given to the company's shareholders. I know it is covered that the court can get the information at any time but is there something set out definitely in the Bill covering what I complain about now—where no information appears to have been made available for some years?
The explanatory memorandum, which, of course, is not a legal document is helpful here. It says:
This section is designed to ensure that in the case of liquidations which take a long time to complete, information regarding the progress made will be filed at suitable intervals for public inspection at the Companies Registration Office.
It is designed to do exactly what the Senator wants.
As well as that, I should like to refer to Section 272 which obliges the liquidator to call meetings of the company and of the creditors of the company at the end of each year. The company, naturally, includes its shareholders.
Section 272 provides for the calling of meetings in the case of creditors' voluntary winding up. There is also a similar provision in Section 262 to provide for the case of members' voluntary winding-up. In each case there is, in the ensuing Sections 263 and 273 respectively, an obligation to hold a final meeting. I think we have fairly well circumscribed the winding up as far as publication is concerned and it might be said we have probably gone too far. In any case I want to impress upon the Senator that the purpose he wishes to achieve in his amendment is very adequately taken care of.
I accept the Minister's statement that Sections 262 and 272 definitely cover the point I am worried about.
Subsection (1) says " the liquidator shall, at such intervals as may be prescribed ". What does " prescribed " mean?
The definitions make it clear that when you speak of winding-up " prescribed " means " prescribed by rules of court ". Section 312 is of interest in that connection.
