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(4) The summary must include a statement in the form of a balance sheet showing the company's assets and liabililities, but the balance sheet need not include a statement of profit and loss. Ordinance, Section 30; See also Ordinances Nos. 16 of 1907 and 20 of 1909; Act, Sections 26, 36: Bill, Clauses 27, 35.
Chinese Adresses.
In the companies' registers of members, and also in the annual lists of shareholders filed with the registrar of companies, the Chinese characters of all Chinese names and addresses will have to be given, Chinese nanes and addresses are of little or no use without the Chinese characters. Ordinance, Sections 29, 30; Act, Sections 25, 26; Bill, Clauses 26, 27.
Inspection of Company's Register.
Every company is bound to allow inspection of its register, a penalty being imposed in case of refusal. Few, if any, of the Shanghai and Tientsin companies have an office here for the transaction of business, and consequently there is no one, strictly, who can "refuse" inspection. A sub-section has been added to the present Bill imposing the same poualty where inspection "cannot be obtained at the registered office with the exercise of a reasonable amount of diligence". This provision is not in the Act of 1908 because probably the difficulty would seldom, if ever, occur in the United Kingdom. Ordinance, Section 39; Act, Section 30; Bill, Clause 31.
Local Register Authorizations,
These are omitted from the Bill, but this is really no change as the Government has been advised already that the section which introduced them is practically inoperative. There is no such thing in the United Kingdom as a local register authorization. Ordin- ances 16 of 1907, s. 5, and 20 of 1909, s. 4; Act, Nil; Bill, Nil.
Reorganisation of Share Capital.
At present, if the rights of the preference sharebolders are defined in the memorandum of association, they cannot be altered under any circumstances, unless express power is given in the memorandum. This is often incovenient. The Bill provides that such rights may be altered, with the consent of three fourths of the class, and with the sanction of the court. This provision was first introduced in the United Kingdom by the Act of 1907. Ordinance, Nil; Act, Section 45; Bill, Clause 46.
Painting up of Name.
Every limited company is at present required to keep its name painted or affixed on the outside of every office where its business is carried on. The Bill adds, "and on the outside of its registered office". This is to meet the case of the Shanghai and Tientsin companies which have no office here "in which business is carried on". The provision is not required in the United King- dom. Ordinance, Section 87; Act, Soction 63; Bill, Clause 64.
First Meeting.
The only provision at present is that the first meeting must (under a penalty) be held within four months after registration, and there are no requirements as to what information the directors must give at such meeting. Under the Bill the provisions are as follows. The first ("statutory") meeting must be held not less than one month nor more than three months from the date at which the company was entitled to commence business (see clause 88), and seven days before the meeting the directors must send to every member, and file with the registrar of companies, a “statu- tory report", certified by two directors and by the auditors, and
containing the following particulars :--
(4.) The total number of shares allotted, with the consider-
ation, distinguishing the shares allotted as paid up otherwise than in cash:
(b) The total amount of cash received on account of the
shares allotted ;
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(e) An abstract of the receipts and payments on capital
account:
(d.). An estimate of the preliminary expenses of the com-
pany:
(e.) The names, addresses, and descriptions, of the directors
auditors, managers and secretary: and
() The particulars of any contract which is to be sub-
mitted for modification.
No contract referred to in the prospectus can be altered ex- cept with the consent of the statutory meeting. The penalty on the directors, managers, and subscribers of the memorandum, is omitted, but the company may be wound up if there is any default in filing the statutory report or holding the statutory meeting. These provisions were introduced in the United Kingdom by the Act of 1900. Ordinance, Section 90: Act, Section 65, $3, 129: Bill, Clause 66, 84, 129.
Annual General Meeting.
The only provision at present is that it must be held once in every calendar year. The Bill provides that it shall be held once in every calendar year and not more than fifteen months after the last preceding general meeting. In case of default, a penalty is imposed and the court may call the meeting. This change was made in the United Kingdom by the Act of 1907. Ordinance, Section 89; Act, Section 64; Bill, Clause 65.
Requisition for Meeting.
Absolute provision is made for the calling of an extraordinary The general meeting on the requisition of the shareholders. articles of a company cannot override this section. This is a good illustration of how the Bill regulates matters at present left to the discretion of each company. All properly drawn articles would provide for the calling of a meeting on requisition, but it is open to promoters to omit the provision, or even to negative it expressly. This section appeared first in the Act of 1900. ́ ́ Ordinancé, Nil; Act. Section 66; Bill, Clause 67.
Extraordinary Resolutions.
These will have to be filed. At present, only special resolu- tions need be filed. This defect was remedied in the Cuited Kingdom by the Act of 1907. Ordinance, Section 93; Act, Section 70; Bill, Clause 71.
Directors.
The Bill contains a number of new provisions relating to directors and promoters which are intended to ensure that the persons hold out as proposed directors shall really assume that office and shall take up and cutiune to hold their qualification shares, to render more real and stringent the liability of directors and promoters for misrepresentation in the prospectus, to provide for greater publicity as to who are the directors of a company, and as to what their interest is in the company and its promo- tion, and to guard against directors comniencing business on insufficient capital. Criminal penalties are imposed throughout the Bill on directors in order to ensure that the provisions of the law shall be carried out, and a director who wilfully makes a material false statement in a return commits a misdemeanour. Only the principal clauses can be referred to here :------
(a.) Register of Directors.The company must keep a register containing the names, addresses, and occupa- tions of the directors, and must allow inspection of the register. It must also send a copy of the register to the registrar of companies, and must notify him of any changes in the directorate. At present this is neces- sary only in the case of companies not having a capital divided into shares.
(b) Appointment.-A director cannot be appointed unless ho has led with the registrar of companies a contract to take and pay for his qualification shares (if any), and a consent in writing to act as director.
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