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Tuesday, 1 November 1983
Page: 2165

Question No. 417


Mr Jacobi asked the Minister representing the Attorney-General, upon notice, on 6 September 1983:

(1) Will the Government exercise its constitutional powers and take steps to improve the inadequate and inefficient methods of the current co-operative system of framing and enforcing companies and securities laws; if so, when.

(2) Has the Attorney-General's attention been drawn to the need for special legislation to allow small businesses to be freed from many of the onerous obligations in the current companies legislation.

(3) Is the Government of the view that many of the existing problems could be overcome if unlimited liability companies were more frequently used for small businesses rather than the conventional limited liability companies; if so, what action will the Government take in this area.


Mr Lionel Bowen —The Attorney-General has provided the following answer to the honourable member's question:

(1) In accordance with the Australian Labor Party's Business Regulation Policy, the Government considers that the present co-operative scheme should be retained while it demonstrates progress in the achievement of its aims. However, in the longer term, the Government would prefer to move to a national system of companies and securities legislation administered by the national Parliament.

(2) and (3) It is widely recognised that there is a need for an in-depth examination of the theory and legitimate use of the corporate form and of the relationship between limited liability and public disclosure. In particular there is a need to examine whether it is appropriate that in these matters small businesses should be subject to the same requirements as apply to large enterprises.

I discussed these matters in an address to a seminar in Melbourne on 30 August 1983 on 'Abuse of Limited Liability' organised by Monash University.

In the United Kingdom a consultative document was issued on this matter in 1981 by the Board of Trade. Included in that document were proposals formulated by the eminent authority on company law, Professor L C B Gower.

In Australia the proposed Companies and Securities Law Review Committee will be operative from 1 January 1984 and will be suitably constituted to conduct inquiries of this kind. I expect that early appropriate references will be issued to the Committee by the Ministerial Council for Companies and Securities.