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INDUSTRY AND TRADE
Companies incorporated overseas are required to register certain documents with the Companies Registry within one month of establishing a place of business in Hong Kong. Only small filing fees are payable in such cases. During the year, 257 of these companies were registered and 84 ceased to operate. At the end of 1983, 1872 companies were registered from 55 countries, including 436 from the United States, 279 from the United Kingdom and 223 from Japan.
The Company Registry also deals with the incorporation of trustees under the Registered Trustees Incorporation Ordinance, and with the registration of limited partnerships.
Insurance Registry
The Insurance Companies Ordinance 1983 was enacted on February 8, 1983, and came into operation on June 30. It repeals or amends insurance legislation previously in force and replaces them with a system which is largely based on United Kingdom legislation. It restricts the transaction of all classes of insurance business in or from Hong Kong to a company authorised to do so by the Insurance Authority, to Lloyd's of London, and to an association of underwriters approved by the Governor-in-Council.
The Registrar General, who has been appointed the Insurance Authority for the purposes of the ordinance, must be satisfied that certain conditions are met before authorising a company. These include the suitability of the directors and controllers of the company; a minimum paid-up capital requirement of $5 million ($10 million in cases of companies undertaking both long term and general business or statutory business, the latter meaning insurance cover required by statute); and a solvency margin requirement of $2 million ($4 million or $6 million in different cases depending on whether both long term and general business are carried on, and whether statutory business is included. Any company, irrespective of the place of incorpora- tion, which is authorised to carry on insurance business in the United Kingdom is given certain exemptions under the new ordinance and may be authorised by the Insurance Authority on the strength of its compliance with the United Kingdom Insurance Companies Act.
There are 300 insurance companies, including 136 local companies, authorised to transact insurance business in Hong Kong.
Money Lenders
Under the Money Lenders Ordinance which came into force in December 1980, anyone wishing to carry on business as a money lender must apply to a Licensing Court, consisting of a magistrate and two lay assessors, for a licence. In the first instance, the application is submitted to the Registrar General as Registrar of Money Lenders and a copy is sent to the Commissioner of Police, who may object to the application. The application is advertised, and any member of the public who has an interest in the matter also has the right to object. The ordinance provides severe penalties for a number of statutory offences such as carrying on an unlicensed money lending business. It also provides that any loan made by an unlicensed money lender shall not be recoverable by court action. Any person, whether a licensed money lender or not, who lends or offers to lend money at an interest rate exceeding 60 per cent per annum, commits an offence and agreement for the repayment of any such loan or any security given in respect of such loan shall be unenforceable. At the end of the year there were 524 licensed money lenders.
Bankruptcies and Liquidations
In Hong Kong, the number of business failures leading to formal insolvency proceedings in court is always comparatively small in relation to the total number of businesses closing down, but nevertheless it has increased considerably since 1980.