The Gazette 1976

GAZETTE

January-February 1976

THE BUILDING SOCIETIES BILL 1975

Part II

by The President (Mr. P. C. Moore)

No. of votes

Management and Administration of Societies The provisions in this regard may be summarised as follows: Every Officer of a Society having the receipt or charge of any moneys belonging to a Society, shall provide a Bond in such sum as may be required by the Society to secure the Society against loss caused by such Officer's fraud or embezzlement and the Bond must be in such form as may be approved of by the Registrar and there must be at least one sufficient surety in the Bond. Alternatively a Fidelity Guarantee Insurance from an authorised or licensed Insurer will be acceptable (Section 39). A Society shall not have less than three Directors and a Society shall not have as a Director a Body Corporate (Section 40). A Director must disclose any interest he may have directly or indirectly in any Contract or proposed Con- tract with the Society and a Declaration of such interest shall be recorded in a special Book or Register kept by the Society for this purpose. The Annual Returns submitted to the Registrar must also contain a record of and details of loans made to a Director or a member of the family of an Officer or to a Body Coporate where an Officer or a member of his family held Shares of a nominal value exceeding 20 per cent of the Shares of such Body Corporate. It is further provided that where the Society approved a loan to a member of the family of an Officer, the terms, including the rate of interest and period of loan shall not be more favourable than those applicable when other loans are made by the Society. It appears that a Director may get special terms in respect of a loan as to rate of interest but a member of his family cannot get any special terms. The Accounts must also show payments made to a Director under the heading of "Emoluments" which is defined as including amounts paid to, or received by a Director for his services as a Director of the Society, or in respect of his services while Director of a Society in connection with the management of the Society's affairs and all other benefits, such as contributions under a Pension Scheme or compensation for loss of office. The Bill also prohibits the payment of tax free remuneration to Directors (see Section 45). The Bill than has detailed provisions dealing with disputes and the determination of disputes : (a) By arbitration; (b) By the Registrar; (c) By the Circuit Court. The Notice of Meetings, the right to attend Meetings and voting is also provided for and the only persons entitled to vote at a Meeting of a Society shall be all members, who at the end of the last financial year before the date of the Meeting, held Shares to which such voting rights attached which were issued by the Society, to a value of not less than £25.00. The voting table provided in the Bill is an interesting innovation, namely :

Not less than £25. and not exceeding £100 Exceeding £100 and not exceeding £500 Exceeding £500 and not exceeding £1,000 Exceeding £1,000 and not exceeding £3,000

1 2 3

4

Erceeding £3,000

5

(see Section 53). The Bill further provides for proxies, the right to demand a poll, and also sets forth the procedures deal- ing with the passing of a Special Resolution. The other provisions deal with the Annual General Meeting, the keeping of Books of Account, Directors' Report, Balance Sheet and filing of annual returns (see Sections 51 to 65 inclusive). The further provisions in this part of the Bill are the appointment of an Auditor and his removal from office, qualifications for the appointment of an Auditor and his submission of the annual and other returns. The Bill makes provision for the keeping of a Register of members and under Section 73 (6) a member of a Society has a right to inspect the Register if the Secre- tary of the Society is satisfied that the application is bona fide and having regard to the interests of the members as a whole and any other relevant circum- stances shall afford a member a reasonable facility for inspecting the Register and taking a copy of any names and addresses in the Register (Section 73). The Society must also keep a Register of Directors and this Register also shall be open for inspection by a member free of charge and by any other person on payment of the prescribed fee. Special provision is made in the Bill (Section 75) to the effect that a Society shall not give any commission in connection with the introduction of Mortgage busi- ness to the Society or in consideration of or in connec- tion with an Undertaking to introduce such business. There is a special provision in Section 75 to the effect that an Officer, Solicitor, or Surveyor of a Society shall not accept in addition to the remuneration authorised by the Rules of the Society, any commission, for or in connection with any loan made or proposed to be made by the Society. Auctioneers are also placed in a similar position. Ministerial Control Special provision is made under Section 76 of the Bill vesting Authority in the Minister after consultation with the Minister for Finance to make Regulations relating to the management of Societies, as he considers necessary or expedient for the purpose of securing their proper and efficient management or for the purpose of promoting the orderly and proper Regulations of Buil- ding Societies' business. This Section is likely to be controversial, as it vests very wide powers in the Minis- ter to regulate the expenditure of Societies, arising from its operation and management and also for a code of practice relating to Building Societies. Under Part 6 of the Act, Section 77, the Minister also has power when he considers it expedient, in the interests of the orderly and proper regulation of Building Society business and 7