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The Dominion Companies Act, 1934: An Appraisal
Published online by Cambridge University Press: 07 November 2014
Extract
It is self-evident that the existence of ten jurisdictions, each having the right to make its own laws for the incorporation and regulation of limited liability companies and each exercising that right, must not only complicate matters greatly for the individual investor, shareholder, or creditor but must also operate as a serious drag on the commercial and industrial development of the nation. One way out of the impasse in which Canada finds herself would be to secure an amendment to her constitution whereby the federal legislature would be given exclusive jurisdiction over companies, and the provinces would surrender their exclusive jurisdiction over property and civil rights so far as was necessary to ensure the effectiveness of the federal control over corporations. This solution is ideal rather than practical, for it assumes self-negation on the part of politicians and comprehension on the part of the electorates greatly exceeding any yet evinced.
An alternative, but distinctly inferior, solution would leave the jurisdiction divided as it is at present but induce all ten legislatures to agree upon uniformity in the essential features of their company laws. This plan would do nothing to remove the handicap under which the federal legislature labours by reason of its lack of jurisdiction in the law of contract, but it has been talked about and is regarded by the mass of people as a practical step—notwithstanding the abortive results of the two Dominion-Provincial Conferences already held on the subject.
- Type
- Articles
- Information
- Canadian Journal of Economics and Political Science/Revue canadienne de economiques et science politique , Volume 1 , Issue 1 , February 1935 , pp. 52 - 63
- Copyright
- Copyright © Canadian Political Science Association 1935
References
1 Bill 64, House of Commons of Canada, first reading, explanatory note facing p. 1.
2 This is true only as a practical proposition. Technically the position is made worse by the new Act because, whereas the Courts formerly might (if they cared to assume the responsibility) appraise considerations received in kind for par value shares, they are now expressly precluded from doing so by s. 12(8) of that Act which states that “any shares permitted by this section shall be deemed fully paid and non-assessable on receipt by the company of the consideration for the issue and allotment thereof. …”
3 20-21 Geo. V, c. 9, s. 6.
4 See e.g., s. 29(2) of the Companies Act of British Columbia.
5 A memorandum submitted by the Central District, Investment Bankers' Association of Canada to the Ontario securities commissioner, January 12, 1934.
6 Compare, e.g., s. 54 of the English Companies Act of 1929 (19 and 20 Geo. 5, c. 23).
7 House of Commons (Canada) Debates, unrevised ed., vol. LXX, 1934, p. 2753.Google Scholar
8 See, e.g., s. 410 of the Companies Act of Manitoba (22 Geo. V, c. 5).
9 See, e.g., c. 33, s. 1 of the Statutes of Ontario, 1928.
10 See R.S.C. 1927, c. 27, s. 52 and form F.
11 Thus in a Dictionary of Investment Terms published by Nesbitt Thomson and Company (1928), an investment banker is defined as one who purchases investments for re-sale to his clients (p. 49). Of underwriting the dictionary states: “Underwriting is still in vogue in Europe, but it is not used to-day to any great extent in Canada, except by investment bankers who not only guarantee the purchase of the issue, but actually purchase it” (p. 73).
12 House of Commons (Canada) Debates, unrevised ed., vol. LXX, p. 3824.Google Scholar
13 Ibid., pp. 3745 and 3747.