have paid the amounts (if any) unpaid on their shares:

(i) a member at the date of re-registration is liable on the Unlimited Basis if he ceased to be a member less than a year before the commencement of the winding up or the winding up commenced within three years of re-registration; and (ii) a person who had ceased to be a member at the date of reregistration is liable on the Unlimited Basis if the winding up commenced less than a year after he had so ceased.

So far as the application of contributions made on the Unlimited Basis is concerned, it should perhaps be mentioned that they will be treated in the same manner as contributions on a normal winding up and will merely swell the general assets of the company for payment to all creditors at the time of the winding up.

One unsatisfactory aspect of Section 44 should be noted: subsection (7) (a), unlike the following paragraph, is subject to Section 212 (1) (c) of the principal Act and this has the effect of conferring a measure of immunity on persons who cease to be members before the winding up provided there is one Continuing Member who is able to satisfy the full amount of the debts and liabilities in question. It follows that in these circumstances an informed shareholder who disposes of his shares shortly before liquidation increases the burden to be borne by those liable to contribute on the Unlimited Basis, incidentally escaping unlimited liability himself.

Accounts and Directors' Report

The new Act calls for a great deal more information about the affairs of companies to be shown in their Accounts and Directors' Report, most of the new requirements being based on recommendations of the Jenkins Committee. Sections 3 to 12 and Schedule 1 (which amends the 8th Schedule to the principal Act) are concerned with the Accounts and Sections 15 to 24 with the

Directors' Report must be shown in that document and not in the Accounts or elsewhere but those permitted to be shown in a statement annexed to the Accounts may alternatively appear in the Directors' Report (Section 163, principal Act).

Section 24 of the new Act requires a copy of the Directors' Report to be circulated with the Accounts to members, debenture holders and others entitled to receive notice of meetings, whereas this was only necessary under the principal Act if advantage had been taken of Section 163 and the Directors' Report in fact contained information which would otherwise have been in the Accounts or in a statement annexed to them.

Previous year's figures

It is, of course, a requirement of the principal Act that, where items appear in the balance sheet or profit and loss account, the corresponding figures in respect of the preceding year must also appear in the balance sheet or profit and loss account as the case may be (paragraphs 11 (11) and 14 (5), 8th Schedule, principal Act). Section II of the new Act extends this principle by providing that where items required by Section 196 of the principal Act or Sections 6, 7 or 8 of the new Act (details of emoluments) to be shown in the Accounts or in a statement annexed are in fact shown in a separate statement, the corresponding figures for the previous year must also be shown in the statement. Similarly, Section 22 provides that where advantage is taken of Section 163 of the principal Act and an item is shown in the Directors' Report instead of in the Accounts, the Directors' Report shall also show the corresponding information for the previous year. No information for the previous year need be shown in respect of items appearing in the Directors' Report unless such items appear in the Report because advantage has been taken of Section 163 of the principal Act to show them there instead of in the Accounts.

The sections of the new Act dealing with the Accounts (Sections 3 to 9) and the amended provisions of the 8th Schedule to the principal Act come into operation on 27th January, 1968, but by virtue of Section 10 those sections and the amendments to the 8th Schedule do not apply to Accounts (whenever presented) in respect of a company's financial year ending before 27th January, 1968. Nor do the Accounts for the first financial year ending after 26th January, 1968 (which must comply with the new provisions) have to show figures for the previous year corresponding to those given to comply with the new provisions, except in relation to Sections 6, 7 and 8 of the new Act.

The object of the provisions of the new Act relating to the Accounts and Directors' Report is to ensure that specific information is disclosed and the relative sections are therefore somewhat detailed. They are dealt with in this booklet in the order in which they appear in the new Act.

Holding companies are required by Section 3 (1) to state, in relation to each company which was a subsidiary at the end of the holding company's financial year, the name of the subsidiary, its country of incorporation (unless it is incorporated in Great Britain and both it and its holding company are registered in the same country) and the proportion (not amount) of each class of its shares held by the holding company. The test of whether or not shares are held by the holding company is the same as in Section 154 (3) of the principal Act but the extent to which the shares are held by the holding company itself (or its nominee) and the extent to which they are held by a subsidiary (or its nominee) must be disclosed (Section 3 (2) ), although there need not be any indication as to which subsidiary holds the shares.

Exemption from compliance with Section 3 (1) is available for holding companies with subsidiaries incorporated outside the United Kingdom or subsidiaries carrying on business outside the United Kingdom. If the directors of the holding company consider that disclosure in relation to such subsidiaries would be

sidiaries, the information required by Section 3 need not, if the Board of Trade agree, be disclosed in respect of such subsidiaries (Section 3 (3) ). In this event the holding company should inform the subsidiary (if incorporated in Great Britain) that it has taken advantage of Section 3 (3) to ensure that, as required by Section 34 (5), the subsidiary's register of substantial shareholdings does not disclose the shareholding to the public.

There is also partial exemption where compliance would result in particulars of excessive length being given (Section 3 (4)). In these cases disclosure may be restricted to the relevant particulars of those subsidiaries carrying on the businesses the results of the carrying on of which principally affected the amount of the profit or loss of the company and its subsidiaries or the amount of the assets of such companies. No guidance is given as to what is meant by 'excessive length' (except that it is left to the opinion of the directors) and in identifying those subsidiaries which 'principally affected' (whatever that may mean) the results or the amount of assets of the group, there seems to be no need to distinguish between those contributing a profit and those a loss.

If advantage is taken of Section 3 (4) the statement must indicate that it deals only with the subsidiaries principally affecting the company's results and a full list of subsidiaries and the other information required by sub-section (1) must be annexed to the annual return (Section 3 (5)).

Substantial share interests

Section 4 contains provisions designed to ensure disclosure of material shareholdings in other companies, both United Kingdom and foreign, which are not subsidiaries. Under sub-section (1) a company which holds more than 10 per cent. of any class of equity shares in another company has to give similar information to that required in relation to subsidiaries under Section 3 (1), including the proportion and identity of each class of shares held. Sub-section (2) requires the same particulars to be disclosed where the reporting company holds shares in another company and the amount of all the shares (not only equity shares) in that

company which the reporting company holds exceeds 10 per cent. of the latter's assets. The 'amount' of the shares held and 'amount' of the company's assets are those stated or included in its Accounts. Presumably in relation to the shares held, the amount will be cost or valuation and, in relation to the assets, will be the gross asset figure.

So far as Section 4 is concerned, shares are only treated as being held by a company if, broadly speaking, they are held by the company itself or its nominee. Shares held by subsidiaries of the company in question are outside the scope of the section and accordingly there is no requirement that in a holding company's Accounts material holdings in other companies owned by a subsidiary should be disclosed. Equally there is no requirement that, for the purposes of the section, shareholdings of the holding company should be aggregated with shareholdings of subsidiaries. Details of subsidiaries' holdings will, if they fall within the scope of the section, appear in their Accounts but these Accounts will not, of course, be circulated to members of the holding company. Exemptions similar to those in Section 3 appear in Section 4. The exemption (Section 4 (3)) applicable (with the consent of the Board of Trade) in cases where the investment is in a company incorporated abroad or operating overseas and disclosure would be harmful to the business of the reporting company or to the overseas business, applies to both sub-sections (1) and (2). As in the case of Section 3 (3), the company in which the investment is held should (if it is incorporated in Great Britain) be informed that the information must not be available for public inspection in its register of substantial shareholdings.

The partial exemption (Section 4 (4)) available where full compliance would result in particulars of excessive length being given is only applicable in the case of the disclosure to be made under sub-section (1) (because, of course, the statement under subsection (2) could not comprise the names of more than nine companies). The wording of sub-section (4) corresponds closely with that of Section 3 (4) but seems even less appropriate. The amount of the dividend paid on the shares comprising the minority interest may affect the profit or loss of the reporting company but,