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Companies Act

Volume 236: debated on Monday 17 March 1930

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61 and 63.

asked the President of the Board of Trade (1) whether, as a result of the experience gained from recent financial disasters, he will take steps to amend the Companies Act, 1929, by adding a clause to provide for the publication of consolidated balance sheets in the case of holding companies; and

(2) whether he will take steps to add a Section to the Companies Act, 1929, designed to secure that the shareholders shall be notified forthwith by the directors of any change in the directorate of the company in which they are concerned?

The hon. Member's suggestions have been noted but, as I have indicated on former occasions, I should prefer to have more experience of the working of the Act (which has been in operation for little more than four months) before considering its amendment.

Why is it necessary to wait for further experience of the working of the Act in view of recent disclosures in certain criminal and civil cases, and is not the hen. Gentleman going to take early steps to improve the Act so as to protect the public?

62.

asked the President of the Board of Trade if he will, for the guidance of the public, publish a skeleton model of a profit-and-loss account such as will satisfy the requirements of the Board of Trade under the Companies Act, 1929?

In view of the great variety in the accounts of companies it was not considered practicable to prescribe in the Act the form of the profit and loss account. The Board of Trade have no authority to determine what form of account would comply with the Act, and there are no requirements of the Board to be satisfied in this respect.

Is the hon. Gentleman aware that owing to some oversight the Act of 1929 does not contain any definition of what was required to be disclosed in a profit and loss account, although it requires a profit and loss account; is it not plain that the provision of the Act which merely requires a profit and loss account is therefore ineffectual, and should not the flaw be remedied?

I believe that the Green Committee rejected a prescribed form and the House also rejected an Amendment for a prescribed form. The fact that it is not in the Act does not give power to the Board to make one.

That being so, and as a mistake has evidently been made, and we may all be to blame for it, will not the hon. Gentleman see that the flaw in the Act is put right quite irrespective of party at the earliest possible moment.

Is it not a fact that there are a great many flaws in the Act and instead of attempting to put one right is it not necessary to bring in an Amending Bill to put them all right?