Pitfalls in Company Legislation
Page 30
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ONE of the oldest and most respected of our engineering institutions has discovered, no doubt to its considerable chagrin, what appear to be important flaws in certain details of its pro cedure. As a result grave doubts have been thrown on the legality of its amalgamation with another institution, which was agreed between them about seven years ago; also upon Some additions and alterations to its by-laws which, amongst other things, affect the validity of an increase in subscriptions. In view of these revelations, the council of the institution finds it advisable to present to Parliament a Bill to remove any doubts in these directions. This, if passed, will become a form of retrospective legislation to establish the legitimacy of the earlier and later proceedings. It may seem strange to many that a body Mrmed in 1847 and as far back as 1878 registered under the Companies Acts, and which, in 1930, received a Royal Charter, should discover such mistakes in procedure, but this is only another proof of how difficult it must be for possibly less knowledgeable people to follow the intricacies of the law and thus unwittingly commit breaches of it. Company law is, of course, particularly difficult and yet is something which applies to so many bodies of a technical nature which come under its provisions.
The example now before us may well act as a salutary warning to other organizations and cause them carefully to study their arrangements and obtain expert advice so that they may not fall into similar errors.
A great deal of sympathy will be extended to the institution in question at the embarrassing nature of the discovery, particularly as it has a membership of many thousands in the general and automobile engineering professions. The officials and honorary officers„ past and present, of both the institutions concerned in the amalgamation and thc later conduct of the joint body, are known to bc men of the strictest integrity and it must have beer a considerable shock to them to learn of what ha! happened in connection with the considerabh amount of thought and energy put into dies( activities.