as partners in their businesses, will do the same thing in registration. The reason for this is that they do not wish to be made liable for the whole of the debts of the firm in case of insolvency. The Chinese law and custom allow the partners of an insolvent firm to pay a part of the firm's liabilities in proportion to their respective interest or share in the capital and profits of the firm. Hence, as long as the English law regard- ing the liability of partners remains as it is, the wealthy Chinese will not come forward to register their true names.
Secondly, in making registration evidence of a partnership; if made primâ facie evidence only, it does not save any trouble or lessen litigation; but if registration be made conclusive evidence of a partnership, then much hardship and mischief will ensue. e.g., capital entrusted to a manager to conduct business-the manager neglects, accidental- ly, wilfully or fraudulently to register his principal--the latter will have no remedy against the manager: this, in the opinion of Dr. Ho Kai, is a direct encouragement to fraud. The manager may also register the name of some other person who is not a partner in the firin. A further difficulty would be the registration of all the widows and orphans of deceased partners.
Thirdly, in requiring the proper persons to register, if the manager only is required to register, he will be liable to abuse his position as before stated. If personal registra- tion of every partner is required, consider the inconvenience and impracticability in many cases, the effect of which would be to prevent capital flowing to the Colony.
Fourthly, the enormous expense and trouble to the Government and the constant consultation of the Register entailed upon the public.
Fifthly, there is great difficulty in determining who and what is a partner in a Chinese firm, as for instance, a guarantor of a Compradore who takes half of the Com- pradore's earnings and commissions-is he to be considered a partner?
Dr. Ho Kai suggests that all Chinese firms who have signed the petition and advocate registration of partnerships, should take steps to advertise voluntarily the names of their partners: after a time, legislation towards that direction may be feasible, but at present he does not agree to legislation. The Honourable Wei Yuk and Mr. Leung Pui Chi concur in the opinions and suggestions of Dr. Ho Kai.
Enclosed is a memorandum from the Honourable J. Thurburn in which he practical- ly agrees with Dr. Ho Kai, and further states that registration would be not only diffi- cult and impracticable, but would tend to drive capital away from the Colony.
The Chairman was also of opinion that such legislation was undesirable because impracticable, insomuch as it would lead to fraud, and would not accomplish the end in view, and that the only people who would benefit would be the lawyers.
Appendix III.
We are asked to report on the advisability of introducing a Bill for the Registration of Partners in Chinese firms.
The real object aimed at is to induce or force the Chinese to register or make known the actual partners in their firms.
The Chinese in their partnerships have always wished to limit their liability to the amount of their share in the business, and dislike being liable for unknown amounts which the manager may contract in the name of the Hong, and, as under British law, and the law of Hongkong, all partners are liable for all the debts of a firm, to avoid this the Chinese have for many years adopted an almost universal custom of men possessed of means, instead of having their own names put in, in a firm of which they are one of the real partners, they put a relation, who has little money to lose, as a partner, they keep the receipt of partnership made out in the relation's name, in their own possession, but, according to law, and I don't see how it could be arranged other- wise, these moneyless men are the real partners and the only people to be sued.