The Gazette 1985

GAZETTE

SEPTEMBER 1985

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. •

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

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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