The Gazette 1979

GAZETTE

SEPTEMBER 1979

14.1 The work of the Committee is divided into consideration of domestic develop- ments in company law and the prospective impact of directives of the European Community as part of the programme of the harmonisation of company law

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14.2 The year opened with Mr. Justice Butler's decision in the Cork Shoe Company case in which he decided that a company could not appoint an attorney to execute deeds on its behalf within the State. One of the most serious effects of this judgment was that the power universally given to receivers in mortgage debentures to execute deeds on behalf of the company was invalid. As a result, the title of those who had purchased through recivers would have had to be regarded as dubious. Furthermore, forms of mortgage debentures would have to be substantially redrafted for the future. Fortunately, this part of Mr. Butler's judgment was appealed to the Supreme Court where it confirmed the widely-held view, that a company had indeed power to appoint an attorney to execute deeds on its behalf in the State and hence, the normal provisions in the mortgage deben- tures authorising a receiver to execute documents on behalf of the company were valid. Members of the profession involved in this type of work therefore heaved a sigh of relief! It should be noted, however, that Mr. Justice Butler in his judgment had confirmed and made it clear that the receiver could not affix the seal of the company to documents unless he were authorised by the Articles of Association to do so (a rare situation). Members of the Committee met with Mr. C. O'Connor, Assistant Secretary, and Mr. S. Cauldwell of the Department of Industry, Commerce and Energy, to discuss with them a number of matters in relation to the Department's responsibility in company law area. Mr. O'Connor thanked the Committee for the help it had been giving to the Department in relation to the various E.E.C. Directives and said he hoped to build on the good relations which had existed between the Committee and his predecessors. The Committee drew his attention to two aspects of the work of the Company's Office which were concerning practitioners. The first of these was the delay in the formation of new companies and the Committee was assured that with the training of new staff it was hoped that this could be accomplished in a minimum of three weeks. Secondly, the members of the Committee said the profession was concerned with what appeared to be new policy in the Company's Office which was resulting in the frequent rejection of names for companies even if they bore no resemblance to the names of the existing companies. It was agreed that this would be looked into. It had been expected that a Company's Bill would have been introduced during the course of the year in order to implement the Second E.E.C. Directive relating to the preservation of capital to deal with a number of limited matters, e.g. removing the upper limit of twenty for partnerships in certain instances. It was disappointing, therefore, that no Bill has appeared as of the date of writing this report. Time is beginning to run out in respect of the implementation of the Second Directive. It should, however, be expected in the coming year. The past year has given members of the Committee an opportunity to assess the working of the Mergers, Takeover and Monopolies Control Act of 1978. Members' attention was drawn in the Gazette to a statutory instrument made under the Act (No. 17 of 1979) entitled Mergers, Takeover and Monopolies (Newspapers) Order 1979. This applied to the merger or takeover involving enterprises, at least one of which was engaged in the printing or publication of newspapers regardless of the turnover or gross assets of either the enterprises concerned. It would seem that in the operation of the Act the Department is clearing most applications reasonably quickly though there have been complaints of very long delays in some instances. The pace of the implementation of the harmonisation programme in company law of the E.E.C. is quickening. In addition to the Second Directive on the maintenance of the companies' capital which has to be implemented by June of 1980, the Fourth Directive on annual accounts has to be implemented by July 1980, and this will require further legislation. Although this Directive is of primary concern to the accountancy profession, there are certain areas in which the Committee consider it desirable to make observations and a memorandum has been submitted to the Department of Industry, Commerce and Energy. The Third Directive on internal mergers, and a Directive on the harmonisation of stock exchange listing, have both been adopted and have to be imple- mented by 1981. It is also expected that the Directive on the contents and supervision and distribution of prospectuses will be adopted shortly. 165 14.3 14.4 14.5 14.6

Brian J. O'Connor Walter Beatty Anthony E. Collins Michael G. Dickson Mary Finlay Gerald FltzGerald Houghton Fry Michael Irvine Patrick Kilroy James 0*Dwyer Laurence K. Shields

Chairman