§ 40 and 41. Sir HENRY CAUTLEYasked the President of the Board of Trade (1) what the legislative authority is by which companies have been permitted by the Board of Trade to escape the penalties incurred by such companies failing to furnish annual reports and balance sheets within the period required by statute;
(2) whether it is owing to shortage of staff that, at the expiration of four months after the date fixed by Act of Parliament, the Board of Trade is still unable to obtain from 600 companies the annual reports and balance sheets specifically required by the Act; and, if it is not owing to shortage of staff, how does he propose to arrange in future to ensure that the public are protected by punctual compliance with the provisions of a law enacted for their protection?
33. Sir GEORGE HAMILTONasked the President of the Board of Trade whether he is aware that 600 companies are still more than four months in default in their obligations to furnish to the Board of Trade annual reports and balance sheets; whether he intends to require compliance with the Act without further delay, or whether he proposes to allow default to continue for longer than four months; and, if so, for what reason?
§ Mr. W. GRAHAMAs the answer is necessarily very long, I propose to circulate the reply in the OFFICIAL REPORT.
§ Following is the reply:
§ The existing arrangements for dealing with companies in default in regard to the filing of their annual return are based upon the provisions of the law under which it is not practicable to compile a complete list of the companies in default in respect of any year until after the end of the following January. When the list has been compiled it is necessary to call the attention of the companies to the default and give them an opportunity of complying with the law. It must also be borne in mind that a large proportion of the companies in default are companies of no general public interest; they include what are practically one-man companies, companies in which all the shares are held by the directors, companies formed to carry on clubs of all kinds, including those of a political, sporting and social character, and moribund companies. In practically none of the cases have complaints been received from shareholders or other persons interested.
§ The number of companies found in default when the list was compiled has been reduced to about one-fourth, and appropriate steps are being taken, including legal proceedings where necessary, to secure compliance with the Act without delay. I may add that the procedure adopted in the last few months is the same as that followed in past years and as I have already explained, it is based upon the existing state of the law. But I am nevertheless considering whether the system of securing compliance with the law can be improved, and if it appears that such improvement can be secured by obtaining an increase of staff, I will not hesitate to ask for it. It is, of course, open to the shareholders in any case in which they have cause to complain of delay in filing the annual return to take police court proceedings themselves or to bring the matter to the notice of the Board of Trade.