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Company Law

Volume 237: debated on Tuesday 25 March 1930

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asked the President of the Board of Trade if he will consider the advisability of introducing legislation for the establishment, in the case of companies of diffused ownership, of a supervisory council representing the shareholders?

I would remind the hon. Member that the directors are appointed by and responsible to the shareholders, and I do not think it would be desirable to diminish the directors' authority and responsibility by the institution of a council to supervise them.

Is it not the case that in many large public companies the shareholders have practically no control and no knowledge of what is going on?

Various proposals have been made for the amendment for the Companies Acts, but I confess that it is difficult to believe that a suggestion on these lines would be valuable. I will consider this among other proposals, but I ought to indicate that view now.

Is not the Liberal party a company of diffused ownership at the present time?


asked the President of the Board of Trade to what number the 2,600 companies which till recently neglected to publish balance sheets and to hold statutory meetings has been reduced; and what he proposes to do about those which have not yet complied with the provisions of the Act of Parliament?

I presume that the hon. and gallant Member refers to the 2,600 public companies which my hon. Friend indicated on the 18th February last had at that time failed to file with the Registrar an annual return in respect of 1929, such return including a balance sheet. The procedure in regard to this matter was set out in the reply to the hon. Member for Hereford (Mr. F. Owen) on 4th February. This procedure has been followed, and, as a result, the number of cases in which no re-terns, or incomplete returns necessitating correspondence, has been received, has been reduced below 1,500.

Does not my right hon. Friend think that the time has come for taking rather sharper measures with these delinquent companies?

That might involve amendment of the Companies Acts, which has been the subject of recent legislation; but my hon. Friend will see the very great improvement that has taken place on this point within the short space of about four weeks.