Judge John has quizzed Supermacs boss, Pat McDonagh about company law.
“The courts are entitled to see every move a company makes,” he said, adding that there are very strict obligations on companies regarding resolutions and minutes of meetings which are “a historic note for anyone who comes to deal with the company”.
He made his comments while dealing with an application by Supermacs owner Pat McDonagh, who has been in the restaurant business for 30 years and in retail for five years, for a licence to sell alcohol at a Spar shop on the Ardleigh Road in Mullingar.
He noted that while there was a company resolution before the court authorising him to represent the company, Mac’s Ltd, Ballybrit Business Park, Galway, there was no resolution authorising his solicitors to apply for the licence.
He asked the Galway businessman if he knew why companies wanted the letters ‘Ltd’ after their name.
“To protect the limitation of the company,” replied Mr McDonagh.
When the judge asked him if he’d like to “think again” Mr McDonagh asked the court to explain what he meant.
The judge said the letters “alert Joe Soap that the liability of the company is limited to the number of shares” and signifies the “status of directors”.
“If I go in and sell you €1,000 worth of goods for resale, I have to realise that your liability is down to the number of shares you have taken up,” he said.
When Mr McDonagh said it would depend on the value of the shares, the judge replied “I’m not going to give you a lecture on company law”.
He told Mr McDonagh that he was concerned that “business people like yourself entrust your business to accountants” who, if asked to add one and one “sometimes come up with five for an answer, then seven and two the following day”.
“What amazes me is that you seek professional advice from accountants,” he said.
The application was adjourned to November 19.