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GAZETTE
January-February 1976
THE BUILDING SOCIETIES BILL 1975
Part II
by The President (Mr. P. C. Moore)
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 :
No. of votes
Not less than £25. and not exceeding £100
1
Exceeding £100 and not exceeding £500
2
Exceeding £500 and not exceeding £1,000
3
Exceeding £1,000 and not exceeding £3,000
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
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