299 / 406
GAZETTE
SEPTEMBER 1985
which he might take the option to call the meeting? The
intention was to impose a time-limit of 56days in total, so
time runs, as it were, from the earliest day. The Minister
explained that this was not an inordinate amount of time
to grant.
11
It may be necessary for a company under its
regulations to give a considerable amount of notice before
the holding of a special meeting. Time was needed to
prepare the presentation of the company's position to the
special meeting.
Conclusion
S.40 will not prove to be a panacea for all problems
relating to companies in difficulties. Viewed indepen-
dently of other provisions, it is unlikely to achieve much
in the way of redressing the difficulties which arise in the
course of corporate management. Presumably, the
intention of the section is that a director will know that he
is committing a serious offence involving a substantial
fine and a term of imprisonment and that he will be
constrained to take the steps required by the Act which he
was not required to take hitherto. The section, however,
does not stipulate that certain consequences could follow
if, having called the meeting and considered "the
problem", nothing was done about the problem. There is
no provision in the section for placing personal responsi-
bility on the directors or on associated or parent
companies for additional debts incurred after the date of
the meeting. The perennial problem of achieving effective
enforcement is particularly acute in this area. There is
doubt as to the proper basis for the valuation of assets and
as regards the type of knowledge necessary to bring the
section into play. It may be that, on its own, section 40 will
raise as many questions as the problems which it is
designed to solve.
•
Footnotes
1. Directive 7 7 / 9 1 / L LC O.J. 1977, 1.26/1.
2. Sec lor example the Minister's Second Stage speech at 342 Dáil
Debates 347. 356-357 (4 May 1983).
3. Prl. 5598 at para. 10. See, however. Temple Lang (1976) 11 Irish
Jurist (n.s.) 37 at 49-51 who argues that these tears are exaggerated.
4. See generally the interaction of views at 98 Seanad Debates 630-636
(I Julv 1982).
5. See generally 342 Dáil Debates 1441-1449 (17 May 1983).
6. Para. 28 of the First Schedule to the 1983 Act amends the Seventh
Schedule to the Principal Act by inserting a new paragraph after
para. 4. Mr. William Farley points out in (1984) 78 G.I.L.S.I, at p. 21
that the provision is slightly unsatisfactory in the short term as. while
the financial situation might be as stated in s.40(l). it may have
become known to a director prior to the appointed day, in which
case an extraordinary general meeting would not be required by the
section.
7. See Savage "Auditors: a Critical Review of their Role" (1983) 4
Company
Lawyer
187.
8. See generally in this connection Trebilcock " T he Liability of
C o m p a ny Directors for Negligence" (1969) 32 M.L.R. 477.
9. 343 Dáil Debates 1453-1454 (17 Mav 1983).
10. |1979] IR 21.
11. [1971] 2 Q.B. 711.
12. Note Fox " T he Evolving Status of the C o m p a ny Secretary" (1982)
Legal Studies
18.
13. 342 Dáil Debates 1422-1423 and 1445 (17 May 1983).
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