JOHN HOOD & COMPANY, Ltd, v W.E. MAGEE (Surveyor of Taxes)
| Jurisdiction | Ireland |
| Judgment Date | 19 June 1918 |
| Date | 19 June 1918 |
| Court | King's Bench Division (Ireland) |
NO. 410.-HIGH COURT OF JUSTICE (IRELAND), KING'S BENCH DIVISION.-
Income Tax, Schedule D. - Residence. - Income Tax Act, 1842 (5 & 6 Vict. c. 35), Section 100, Schedule D, Case I. - Income Tax Act, 1853 (16 & 17 Vict. c. 34), Section 2.
A Company, which was registered both in Ireland and in the United States of America, carried on a business which consisted of purchasing raw linen goods in Scotland and Ireland, contracting for the manufacture of the goods by other firms, folding the finished goods in its own warehouse in Belfast and selling them, principally in the American markets. A small portion of the Company's goods was sold in the United Kingdom.
The sole director of the Company resided in the United States of America and under the Articles of Association he exercised, so long as he remained a director, exclusive and supreme control of the Company, although as a shareholder he did not possess a majority of the votes attaching to the shares.
The registered office of the Company was situate in Belfast, where general meetings were held, the minute book kept, the Company's accounts audited and dividends declared.
Held, that the Company was for Income Tax purposes resident at the registered office in Belfast where central management and control was exercised, and that the Company was assessable to Income Tax in respect of the whole of its profits under Case I of Schedule D.
Stated under 43 and 44 Vict., ch. 19, Sec. 59, by the Commissioners for the Special Purposes of the Income Tax Acts for the opinion of the King's Bench Division of the High Court of Justice.
1. At a meeting of the Commissioners for the Special Purposes of the Income Tax Acts held at Belfast on the 5th November, 1915, for the purpose of hearing Appeals, John Hood and Company Limited, having its registered office at 14, Linenhall Street, Belfast, appealed against an assessment of £750 for the year ended 5th April, 1913, and against an assessment of £3,000 for the year ended 5th April, 1914, made upon them under Schedule D. of the Act 16 and 17 Vict., cap. 34, Sec. 2, in respect of the profits of the business carried on by them.
2. The said limited company (hereinafter called "the company") was incorporated in Ireland on 10th January, 1913, as a company limited by shares, having a registered office situate at 14, Linenhall Street, Belfast. The company has also been registered in the United States of America under the same title.
3. The Memorandum of Association of the Company states (inter alia) that:-
II. The Registered Office of the Company will be situated in Ireland.
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III. The objects for which the Company is established are:-
(a) To acquire and take over as a going concern and carry on the undertaking of the firm of John Hood and Company of Franklin Street, New York, upon the terms contained in an Agreement dated the 11th day of December 1912, and made between John Hood of the one part, and David McIlroy as a trustee for the Company of the other part.
(b) To carry on in all or any of their branches the trades or businesses of linen, union, cambrie, cotton, lace and embroidery merchants, and commission agents, silk mercers and woollen merchants or factors.
(c) To buy, sell, manipulate, prepare for market, and deal in any capacity, and either directly or through agents, factors, or brokers, in all classes of textile goods, fabrics, commodities, and merchandise.
(d) To do all or any of the above things in any part of the world, and as principals, agents, contractors, trustees, or otherwise, and by or through trustees, agents, or otherwise, and either alone or in conjunction with others and to establish and regulate agencies in all parts of the world for the purposes of this Company.
IV. The liability of the Members is limited.
V. The capital of the Company is £30,000 divided into 1000 Six per cent. Cumulative Preference Shares of £10 each, and 2000 Ordinary Shares of £10 each.
4. In the Articles of Association it is provided (inter alia)as follows:-
Shares.
5. Of the 3000 shares constituting the capital of the Company, the 1000 shares numbered 1 to 1000 shall be called Preference Shares, and the others shall be called Ordinary Shares.
9. The holders of the said Preference Shares shall be entitled to notice of, and to attend either in person or by proxy and vote at all General Meetings of the Company.
9. General Meetings.
51. A General Meeting shall be held once in every year at such time (not being more than 15 months after the holding of the last preceding General Meeting) and at such place as the Directors from time to time shall determine. A General Meeting, whether ordinary or extraordinary, shall, save as provided to the contrary by the Company's regulations, and subject to the restrictions imposed by such regulations or by statute, have power by resolutions duly passed thereat, in accordance with such regulations, to bind the Company and the members thereof, in all matters and things relating to, or affecting the affairs, concerns, and property of the Company.
54. Fourteen days' notice at least of every General Meeting, Ordinary or Extraordinary, specifying the place, time and hour of meeting, and, in case of special business, the nature of such business, shall be served on the members entitled for the time being to receive notices in the manner in these Articles provided; but a meeting may, with consent in writing of all the shareholders for the time being, be convened on a shorter notice and in any manner they think fit.
58. Two members personally present shall be a quorum for a General Meeting . . . .
60. The Chairman, if any, of the Board of Directors shall preside as Chairman of every General Meeting; but if there be no such Chairman, or if at any meeting he be not present within fifteen minutes after the time appointed for the meeting the members present shall choose one of their number to be Chairman of the meeting.Votes.
67. At all General Meetings of the Company every member shall have one vote for each share, whether ordinary or preference, held by him, and at any meeting of preference shareholders, every holder of a preference share shall have one vote for each preference share held by him.Directors.
75. John Hood shall be the first Director of the Company.
80. The number of the Directors shall be such as General Meetings from time to time direct, and the General Meeting fixing the number shall have power to elect duly qualified persons to bring the number of Directors up to the number fixed. Powers and proceedings of the Directors.
93. The general management and direction of the business and operations of the Company is vested in the Board of Directors, who in addition to the powers and authorities by law, or expressly by these Articles conferred upon them, may exercise all such powers, give all such consents, make all such arrangements, and, generally, do all such acts and things as are authorised to be exercised, given, made, or done by the Company, and are not by law, or expressly by these Articles, required to be exercised, given, made, or done by the Company in General Meeting, subject, nevertheless, to the provisions of the Companies' Acts for the time being in force, and of these Articles, and to such, if any, regulations not being inconsistent with those provisions as are from time to time prescribed by the Company in General Meeting. But no regulation made by the Company in General Meeting shall invalidate any prior act of the Board which was valid before such regulation was made.
97. The Directors shall meet together for the despatch of business at such times and places as they think fit, and may make such regulations as they think proper for the summoning, holding, and adjournment of their meetings, and for the transaction of business thereat, and for determining the quorum necessary for the transaction of business. A meeting of Directors for the time being at which a quorum is present, shall be competent to exercise all or any of the authorities, powers and discretions, by or under the regulations of the Company for the time being vested in or exercisable by the Directors generally. Two Directors shall form a quorum at all meetings of the Directors until otherwise determined by the Board. If there shall be only one Director he shall have all the powers hereby vested in the Board of Directors.
101. A resolution in writing signed by all the Directors, or by a sole Director, shall be as valid and effectual as if it had been passed at a meeting of the Directors duly called and constituted. A Director may appoint a person to represent him and act as his proxy at any meeting of the Board. The act of any such proxy shall be deemed to be the act of the Director appointing him.
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106. The Directors shall cause minutes to be made in books, to be provided for the purpose, of the following matters, namely:-
(2) Of all the appointments of officers and committees made by the Directors.
(3) Of the names of all the Directors present at every meeting of the Directors, and of the members of committee appointed by the Directors present at every meeting of the committees; and of the resolutions, orders, and proceedings of all meetings of the Directors, and all committees.
(4) Of the resolutions and proceedings of all General Meetings.
106. Accounts and Audit.
113. The Directors shall cause true accounts to be kept of the property and stock-in-trade of the Company and of all sums of money received or expended by the Company . . . .
114. A shareholder-merely as such-shall not be entitled to inspect the books, accounts, documents, or writings of the Company, except such as are produced for that purpose by the Directors at the General Meetings, or such as he is entitled to see by Statute.
115. At every Ordinary General Meeting after the Statutory Meeting the Directors shall lay before the meeting a statement of the accounts of...
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