GLASGOW FACES THE PROPOSAL TO BUILD BUS BODIES
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The Town Clerk Sets Out the Difficulties of Forming an Incorporated Company, the Members of Which are Members of the Town ,Council CONSIDERABLE interest attaches to the suggestion emanating from the Glasgow Corporation transport committee appertaining to the formation of an incorporate company, composed of members of the town council, to deal solely with the building of bus bodies for the transport department, Some time ago the tninsport committee sought legal advice qn the matter and it was unofficially given out that there were no serious grounds for rejecting the suggestion. The town clerk, Mr. D. Stenhouse, however, has prepared a lengthy report on the whole matter, and points out various diffieulties and objections. These have been considered by the committee, and it is now understood that a scheme is being prepared whereby it is hoped to circumvent the legal objections.
In his report the town clerk sets out various provisions of the Companies Act, 1929, and shows that, so far as the incorporation of a company i3 concerned, there ate no difficulties.
Assuming that a company is to be formed, he asks, who is to take the. necessary steps to form the company, who are to be its members, and what is to be its relation to the corporation?
An important point arises: so far as the eorporation is concerned, it clearly cannot be a party to the initiation-and formation of the company. Acting in a personal capacity, there is nothing in the Companies Act, 1929, to prevent the requisite number of members agreeing among themselves to form a private company with such capital as may be considered necessary. It could be provided in the Articles of Association that the shareholders shall be members of the corporation and that no share in the company shall be held by any person who is not a member. This, the town clerk states, would necessitate a provision in the Articles for the transfer of any share or shares held by a member-, to some other member on resignation, retirement or death.
As regards the question of whether tne corporation would be entiad to provide he company with premises and plant, the town clerk states it appears
to him that it can only be answered in the negative, as the corporation would not be entitled to use its statutory borrowing powers or their revenues under the Tramways Acts in making such provision. (One of the main vv.-. sons, it will be recalled, for incorporating a separate company was to utilize the present bus section at the works of the department for building bodies and to transfer there 200 men who have been engaged on the work of reconditioning tramcars, the programme of which is almost completed.)
The town clerk raised another point. If they had premises vacant, the corporation might let them at a reasonable rent, but was the corporation entitled to let premises and plant for the parnose of the manufacture to itself alonet of bus bodies, and to purchase bus bodies from a private company the members of which were members of the corporation? , So far as contracting with a company in which a member of a corporation was concerned, the matter is regulated by the Town Councils (Scotland) Act, 1900, Section 13 of which provides for disqualification of councillors who have any share or interest in a contract with a council.f Ile further pointed out thateby the Acts of Parliament conferring powers on the corporation to provide and run buses it is specifically prohibited from manufacturing buses, which rule must not be infringed.