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1973 to adopt the Jenkins Committee's recommendation to include
companies limited by guarantee within the scope of the proxies
legislation, they had not foreseen the practical implications for
clubs in Hong Kong. This was hardly surprising because the clubs
themselves had overlooked the implications and had not raised the
point at any time during the very lengthy period of public consultation
over the two bills containing the proposed new Sections 114C and 157A.
4.12
Members considered whether there was any satisfactory method
of distinguishing between companies limited by guarantee which were
private clubs in the ordinarily-accepted sense of the term and
those which were not and whether different provisions regarding
proxies could be applied to each. It was suggested that one ground
for distinguishing between them was that most established clubs had
been granted certificates under Section 21 of the Companies Ordinance
entitling them to dispense with the word "limited" in their names.
It
was pointed out, however, that before a company could get a licence under
Section 21, it usually had to demonstrate, inter alia, an established
history and financial stability. This meant that a number of new
clubs which were perfectly bona fide, were not eligible for a Section 21
licence in their early years. In addition, many excellent clubs of
long standing simply did not think it necessary to go to the considerable
expense and administrative effort involved in getting a Section 21 licence.
Members decided that, in the absence of a satisfactory method of categorising
companies limited by guarantee, any amendment to Sections 114C and 157A
should apply to all such companies.
4.13
After careful consideration, we reached the conclusion that,
in the case of a company limited by guarantee, the basic principle
should be that only members who are prepared to attend meetings should
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