The Henry George Club Limited was formed in 1920 by a group of far sighted Georgists who considered the movement needed its own secure accommodation. They formed the Henry George Club Limited with the objective of purchasing a permanent headquarters in Melbourne. Its Memorandum of Association supported the cause of free trade and the taxation of land values on principles laid down in the writings of Henry George.
The first Directors of the Henry George Club were Charles H Edmondson, Walter Burley Griffin, Dr Paul Greig Dane and Dr Edgar W Culley, George F Davis, Basil J Parkinson and Frank H Langwill. They purchased two cottages at 18-20 George Parade, off Collins Street. These were converted into two shops for letting , with a meeting room added above them, which served as headquarters of the Henry George League until 1971.
In 1962 the Henry George Club Limited undertook and completed a complete remodelling and extension of the George Parade property which until then had had only occupied half the site. The new extension made it a more modern building with two tenanted premises above and two modern shops below. One of these was let while the other became the headquarters of the Henry George League which proved adequate until 1970.
The extension involved a mortgage of £11,000 supplemented by non interest bearing loans and debentures subscribed by many of the Henry George League members. They were covered by the higher rentals appropriate to the new buildings. The official opening of the new building was conducted by the Hon. EL Kiernan, who had been for many years a strong advocate of our principles in the rating reform field and had played a major part in the securing the passage of the legislation which enabled Victorian councils to rate upon the unimproved land value. Associated with him in this ceremony was Mr L.F.Bawden, then President of the Henry George League.
In 1970, Conzinc undertook plans to build a multi story complex which took in the whole block of which the Henry George Club's building was part. This led to an offer for site which the Directors of the Club accepted.
A replacement property was bought at 56 Hardware Lane. This site had a frontage of 40 feet compared with 30 feet at George Parade and the sale of the latter permitted the Club to pay out the mortgage. The Club expected to be in the Hardware Lane property for many years, but the desire of a large overseas firm which had bought the adjoining sites to obtain 56 Hardware Lane as well, so that they could erect a 10 storey building. This led to purchase and exchange for another property at 27-31 Hardware Lane. This building was better suited to the Henry George Club and the Henry George League needs, and the ground floor was fitted out to suit the movement's purposes. We were able to let the two upper floors and a small ground floor shop.
This arrangement remained in place until 1999 when the Club decided to move with the League's agreement to the first floor. This provided more space and leasing the ground floor shop yielded superior rental income. The first floor was tastefully decked out under the watchful eye of John Poulter. The communication network was updated with new computer and phone systems. This resulted in a pleasing working and social environment for the occupying Georgist bodies.
The following significant proposal was put to Henry George shareholders in the new millennium - and a vote was carried to move in this direction.
The Henry George Club Limited was incorporated on 28th July 1920 to purchase headquarters from which the Georgist organisation could work. The original shareholders were supporters of the Georgist philosophy who took up shares as a form of donation to the Georgist cause. They were not making an investment for profit or gain. They were supporting a cause.
With the benefit of hindsight, the company limited by shares was not the appropriate structure for this sort of activity. Shareholding in a company carries with it an entitlement to dividends and a return of capital on a winding up or sale of the shares, but the subscribed capital had been in the nature of a donation.
Times have changed. Some of the original shareholders have died and their shares transmitted to their executors and transferred to their beneficiaries. The asset has grown substantially in value and there is some income generated by the company’s activities.
The time has come to ensure that the original purpose is fulfilled before subsequent shareholders, who have no knowledge of the original purpose come to look upon their shares as valuable assets and ultimately push for a sale of the asset or a liquidation of the company or a push for it to engage in more profitable activities - which will divert it from its objectives. The executive has responded to requests from members who wish to see that their “donation is preserved for the future of the Georgist movement.”
Our solicitors have advised that the ideal structure is a company limited by guarantee. However, because it is not possible to convert to a company limited by guarantee under the Corporation’s Law the recommended structure is a company limited by both shares and guarantee with the rights attaching to the shares severely restricted and that no shares be issued.
Such a company would ensure that the capital subscribed by the original shareholders remains in the company and is used for the purpose for which it was originally intended. No individual would benefit financially from his or her shareholding and on an ultimate winding up of the company any surplus funds would be directed to an organisation with similar aims and objects to the company.
COMPANY LIMITED BY SHARES AND GUARANTEE
A company limited by shares and guarantee is one in which the guarantee members agree to contribute an amount of money towards payment of the company’s debts on winding up provided there is a shortfall. The company can also allot shares but will not do so. Membership is applied for and is maintained as long as the member pays the annual membership fee of $10.00 plus GST, or such other amount as the Committee decides. If a member dies or ceases to renew his or her membership, membership lapses. No value attachs to membership and it cannot be transferred. If 75% of the members resolves to convert the company to a company limited by share and guarantee, existing members will become foundation (life) members for no fee. New members will apply for membership and pay an annual fee. Profits may be paid to the Henry George Foundation.