The Dominion of Canada Companies Act, 1934.

Abstract The new Dominion of Canada Companies Act, which came into effect in October of 1934, is a distinct advance on the law as it stood with regard to the prospectuses and the accounting of companies; but in so far as, so-called, "Distributable Surplus" is concerned, it only ameliorates a dangerous condition and does not remove it altogether. The phrase "Distributable Surplus," used as it is in Dominion of Canada Company Law, is not a good one. It's meaning is limited to the surplus contributed by shareholders, when paying for their no-par-value shares. It has been pointed out that "Distributable Surplus" is desirable, where a holding company is taking over a subsidiary, the shareholders of which have not had a dividend for the period just closed. They are to be paid their dividend out of the "Distributable-Surplus" set up. With regard to profits and losses of the company and its subsidiaries the auditor must report on their nature and source for the three preceding years, or for less, if the company has been in business for less than that period. The same must be done for a business, which it is intended to purchase out of the proceeds of the issue, directly or indirectly.