I move amendment No. 55 :
In subsection (3), line 11, to delete " 21 " and substitute " 7 ".
The purpose of this amendment is to alter and reduce the period set out in Section 159 and to provide that the auditors' reports shall be sent to every member of the company " not less than seven days before the date of the meeting." I think the idea behind the amendment is that a period of 21 days is too long.
We dealt with a point like this on another amendment. The practice is to send notice of the meeting, and any other documents necessary to the proper carrying out of the meeting, to the shareholders in the same envelope. I think it would be no advantage to the company, or the company's officials, to require that notice of the general meeting should be sent 21 days beforehand, and to give them 14 days' grace to send the accounts. I doubt if any company would avail of any concession of that nature. I would not raise this point if the amendment were generally acceptable, but the subsection to which Deputy Costello has put down the amendment is subsection (3) and the obligation to send out the accounts 21 days before the date of the meeting is provided for in subsection (1); the mention of 21 days in subsection (3) is only ancillary. But that comment is only by the way. On its merits apart from the convenience of the companies, I would suggest that a member of a company would require 21 days to examine the accounts. Very many members of companies are not professional accountants, and have not the services of professional accountants, and they might require a period longer than seven days in which to examine the documents, or to have an examination carried out by someone else on their behalf. I think there is not a good case for the amendment, but if Deputy Cosgrave would like to argue further I am prepared to listen.
I am satisfied.
There are two principles in this Bill. One is the principle of the general public knowing what is going on where companies are concerned. We accept that that is desirable. The second is the principle of giving information to members of a company. There might be things which one might wish to keep only to members of a company. Would the Minister consider inserting in that section a provision that publication through a proper medium would be sufficient service ? That is a point for consideration. I do not want to press it.
I could consider it.
It could be in the form of an advertisement in a medium of sufficient universality, I hasten to add. I notice that in another section which we dealt with the other night there is a reference to an advertisement in a newspaper circulated in a district. I should like to have the point considered that there could be an option which would give sufficient service in respect of complete publication.
It is possible.
There may be arguments against that option. It would have to be a notice in writing. There is a point to be considered there.
I will consider it.
Is Deputy de Valera suggesting that we should dispense with notices of meetings ?
No, I am talking about the method of service. Take the common custom of commerce. A company may have an article for sale which may be of interest to some people. There are two courses open to them. They may write to those people. We all know that certain people are on lists and are circularised. The alternative is that they may advertise urbiet orbi in newspapers or on the television screen. I am suggesting that in relation to this section there should be an option in the method of service, that a sufficient service would be general publication in writing.
The purpose of this legislation is, in the main, to protect shareholders and the public, and to keep the public informed. However, this is something we can look into and provide for if we find it feasible, and if there is no objection.
What exactly is the Minister looking at now ?
Deputy de Valera suggests that, rather than obliging a company to send notice of meetings and copies of accounts to individual members, if the company so decided it might serve that notice by way of publication in the papers and publish the accounts also in the papers.
Subject to the usual provision that it would be in accordance with the articles of association.
Have we not to make sure that the advertisement does, in fact, reach the shareholders——
That is a point.
——and is read by them? If a company with its headquarters in Donegal announces that the next meeting of shareholders will be held in Ballyshannon on such and such a date, makes that announcement and publishes its balance sheet in a small local publication, what chance has a shareholder in Wexford or Cork of seeing it ?
I said at the beginning " in a medium of sufficient universality ". I think those are the words I used.
Whatever about publishing the accounts in a newspaper I would be doubtful about the notice of the meeting being sufficiently serviced by advertising.
Would the Minister examine it?
I will.
If I am a shareholder in a Dublin company and the meeting is be held in Dublin, I might be away some place and I might not see a paper while I am away. If the company is compelled to send the notice through the post when I come back I will see it, but if it is in the paper it might pass me by. I think the obligation to ensure that a person gets notification by post is a better safeguard.
It is.
What about the shareholder living outside the country?
You would have to insist that the notice be sent, whatever about the notice referring to a newspaper advertisement of the accounts.
There are too many advertisements in newspapers already.
Might I refer to another matter on the section ? In regard to private companies, the section requires the accounts to be sent to all the shareholders. In respect of most private companies in this country the accounts are prepared by the auditors and accountants and there are typed copies. If all the shareholders in a company waived their right to receive accounts that would be a considerable convenience. The practice at present is to send accounts to the directors, and possibly to the major shareholders; in the case of a family company in which you might have a chairman and managing director, with three or four members of his family shareholders, and his wife a shareholder and director, it seems rather unnecessary to require direct service of the accounts on her if, in fact, she does not really need them; or if she, in general terms waives her right to receive them, that might serve a very useful purpose.
I should be frightened of that, I must say. I would protect the right of the wife. Even apart from a wife being involved at all, a minority of the shareholders might easily be persuaded—in fact, might almost be bulldozed—into giving their consent. It would, I think, be against the general tenor of the Bill to give a way out of furnishing accounts to every member of the company. I can see Deputy Byrne's point that in many cases it might not be strictly necessary, but I think it would be upsetting the general principle of the Bill if we do not make it absolutely obligatory that every member gets the full accounts. If they do not want them, they can tear them up, but I should be afraid that in certain circumstances the suggestion made might be an incitement to a dishonest board of directors to persuade certain minority interests to waive their rights, and I do not think the way should be left open for that.
I am speaking of private companies only.
Even in private companies there would be danger. It might be a united family at first, but conditions might change. A son, or a daughter, might get married and another interest would be involved. They might want to maintain the right or they would have to re-establish the right if it had been waived. I would let this stand.
The general obligation to send the accounts to all members was, in fact, recommended by the Committee. I think it would be undesirable to give a company a way out of the obligation to send the accounts to those concerned.
Am I right in assuming there would not be any default if someone did not complain at the particular time ? It might well be that a man would get the accounts and show them to his shareholder wife and there would be no penalty unless she says she never got the accounts.
It seems to me to be a very short step from that to not troubling about the meeting at all.
Of course that is, in fact, what happens.
If a fellow is caught he should suffer. If he gets away with it, well and good—you cannot help it.
It is all right if you do not provide a penalty. If the balance sheets are not sent there is a fine of £50.
