§ Report from the Select Committee considered (according to order).
§ LORD HERSCHELLI have to present to your Lordships the Report of the Joint Committee appointed by your Lordships' House and the other House to consider the subject of Bills which involved alterations in the Memoranda of Association of Joint Stock Companies. Your Lordships will remember that the appointment of the Committee arose out of the circumstance that a Bill which had been read a second time and passed in the other House, with the sanction of the Chairman of Committees, in this House did not pass the Second Reading, inasmuch as it was thought that the matter should be considered and dealt with how far Joint Stock Companies registered under the Act of 1862 ought to be permitted to invoke the aid of Parliament to alter their Memoranda of Association. Accordingly, a Joint Committee of both Houses was appointed in order that some uniform system might be laid down applicable to both Houses. I have now to present their Report. They recommend, in the first place, general legislation to enable companies without the necessity of resorting to Parliament, under strictly defined conditions and limitations, which are specified in the Report, to make alterations in their Memoranda of Association with the sanction of the Court, giving full opportunity to all those whose interests might be affected to be heard, and to show cause against any such alteration, and leaving the matter (subject to any opposition) to the determination of the Court. But the Committee, feeling that until any such general legislation is passed it would not be right that there should be an absolute barrier to companies obtaining an alteration of their memoranda, suggest that Parliament should, in the meantime, deal with the matter upon the same lines as those which they propose the Court should deal with it hereafter in the case of general legislation—that is to say, that the alteration, if it involves the creation of new objects, should be only permitted where those objects are cognate with, or ancillary to, the existing objects, and where the necessity has arisen or the application is based upon circum- 1292 stances which have developed themselves since the time the company was originally formed. I think that with the limitations which have been laid down by the Committee, and which will now have the sanction of a Committee of both Houses, the matter may be safely left in the way they have suggested. I, therefore, move that your Lordships do agree with the Report.
* THE EARL OF MORLEYI should like to say one or two words on this subject, as the action which I took with regard to the Belgrano Gas Company Bill (which is again down for Second Reading to-night) led to the appointment of this Committee. When that Bill first came before your Lordships' House I felt, as my noble Friend has stated, that there were no precedents which would allow me to pass that Bill without the knowledge of Parliament, and, therefore, I was extremely glad, after the Second Reading of the Bill had been suspended, that a Committee was appointed to inquire into the subject generally, and to lay down rules for the guidance of Committees of this and of the other House of Parliament in cases where companies desired to alter their Memorandum of Association. I had the honour of serving on that Joint Committee, and I entirely endorse what fell from my noble and learned Friend Lord Herschell. I think that under the conditions laid down in that Report the House may safely allow these alterations in the Memorandum of Association of companies under special circumstances as described in those conditions. But, my Lords, I venture to express the hope that the general legislation which is suggested in that Report will not be delayed longer than is necessary.
§ THE LORD CHANCELLORThis is a very wide subject, and I am very doubtful whether in the present condition of affairs it would be altogether right to assume that these recommendations of the Committee are in accord with the general opinion of Members of your Lordships' House. It must be remembered that the subject with which one is dealing is one very important, indeed, to almost every Member of the State. People embark in a particular company, and they have their views for so doing, and they very often take shares as an investment, and they 1293 are responsible for any calls that are made. Of course, I am referring, when I talk of companies, to what is now almost universal, the turning of various businesses into limited liability companies. People might or might not have adopted the sort of view that they could at all events, without risk to themselves and their future fortunes, invest in a particular speculation. It is now suggested that under certain conditions (what they are I do not at this moment know) the objects with which the company was started may be changed. I do not know whether the Committee recommend that the shareholders should be consulted. In the particular case which has given rise to this Committee it was a very strong case. Practically, every shareholder had given his assent to the change. There was also the question of rival companies, and the rival companies that might have been supposed to be interested in this matter had also not only given their consent, but I think urged that the alteration of the Memorandum of Association should be permitted. Therefore, I am not speaking at all in reference to the Motion which the Chairman of Committees is about to make for the Second Reading of the Belgrano Gas Bill; but I wish to guard myself against being supposed to adopt the general view put forward by both the noble Lords who have addressed your Lordships. I think it may well be that merely to afford opportunity to some shareholder or creditor or rival company to come forward and oppose, would or might not be sufficient guarantee, because everybody who is connected with companies—at least who has had to deal with them in judicial matters—knows perfectly well that what is everybody's business in such matters is certainly nobody's business, and many persons will allow things to be done because they will not take the trouble to interfere, and they might be grievously wronged by being compelled to enter into business of which they had no notion at the time they became shareholders. I do not, of course, wish at all to speak in an adverse view of this Report, which is entitled to the respect which is due to a Report considered by those noble Lords and hon. Members of the other House who formed this Committee. All I wish to do at present, 1294 having had no opportunity of considering this Report, is to guard myself against being supposed to adopt all its recommendations, and reserve to myself the right of discussing the matter in another Session.
§ Report agreed to.