Oral Answers to Questions — Company Law.

– in the House of Commons on 24th November 1931.

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Photo of Sir Louis Smith Sir Louis Smith , Sheffield, Hallam

14.

asked the President of the Board of Trade whether he will set up without further delay a Departmental Committee to deal with the defects in the Companies Act, 1929, revealed by the Hatry and Kylsant cases, and to recommend constructive methods for preventing limited liability being used any longer as a screen behind which the confidence of the investing public can be abused?

Photo of Sir John Haslam Sir John Haslam , Bolton

24.

asked the President of the Board of Trade whether, as a result of recent cases in the criminal courts which have shown that unscrupulous persons can prevent ownership of capital controlling that capital in joint stock enterprises, he will now consider amending the Companies Act of 1929 and the regulations for companies operating under a Royal Charter so as to render the Companies Act capable of protecting the public?

Photo of Mr Walter Runciman Mr Walter Runciman , St Ives

The Companies Act, 1929, which came into force on the 1st November, 1929, incorporates the revisions which were made in the law by Parliament in 1928 after a thorough inquiry by a departmental committee. In these circumstances the time is hardly ripe for a fresh inquiry, but if my hon. Friends will let me have their suggestions on the particular points which they have in mind I will have them noted for investigation when the question of amending the Companies Act is under consideration.

Photo of Sir Louis Smith Sir Louis Smith , Sheffield, Hallam

Is not the right hon. Gentleman aware that a small inquiry into these matters may well encourage the investing public to put more capital into industrial securities?

Photo of Mr Walter Runciman Mr Walter Runciman , St Ives

That will certainly be kept in mind.

Photo of Mr Arthur Samuel Mr Arthur Samuel , Farnham

Does not the experience of the last two years show that the longer this Act goes unamended the greater will be the loss to the public?

Photo of Lieut-Colonel Sir John Mayhew Lieut-Colonel Sir John Mayhew , East Ham North

43.

asked the President of the Board of Trade whether he is prepared to take any steps to prevent the use of the title British by companies regardless of foreign ownership of the greater part or of the whole of their capital?

Photo of Mr Walter Runciman Mr Walter Runciman , St Ives

This proposal involves the general question of compelling disclosure of the persons who are beneficial owners of the shares of a company as distinct from those whose names are required to be stated in the documents filed with the registrar. This is a matter of very great difficulty and I am afraid that I could not hold out any hope of introducing legislation which would be necessary to give effect to my hon. and gallant Friend's suggestion.

Photo of Lieut-Colonel Sir John Mayhew Lieut-Colonel Sir John Mayhew , East Ham North

Is the right hon. Gentleman not aware that the words "Royal" and "Imperial" may only be used in the title of a company with the consent of the Home Secretary, and does he not think that the word "British" presents to nearly all of us an equal if not greater significance than the word "Royal" or the word "Imperial," and will he not take steps to see that the word "British" is suitably safeguarded?

Photo of Mr Walter Runciman Mr Walter Runciman , St Ives

I will certainly take note of what my hon. and gallant Friend has said.