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the business of the company was to be carried on solely abroad and under the control of foreigners, the application for registration was withdrawn as a result of difficulties raised by the Board, but no other case can be traced in recent years in which the Board have felt able to instruct the registrar to refuse registration.
Even if it were held that the present law justified refusal of registration on the ground that the papers indicated that there would be no management or business in this country, no really effective action could be taken by the Registrar of Joint Stock Companies because, as soon as it became known that objections of this kind were raised by him, the papers presented would be framed either so as to contain no indication whatever of where the business and management was to be or so as to suggest that the management at any rate was to be in this country; moreover, it would not seem that any amendment of the English law so as to enable the registrar to require evidence as to the place where the business of the company was to be managed would be of much use." It would be extremely difficult for the registrar to discriminate between cases in which this evidence was to be required and cases in which it might be unnecessary, and the result would probably be that such evidence would have to be given by the great majority of companies applying for registration in order to meet the difficulties which have arisen in the comparatively few cases of companies trading and managed abroad which are not genuine British concerns. Even if these precautions were taken on the registration of a company, there is always the possibility that the locality of the control of the business may be changed in a more or less genuine manner, and this difficulty could not be dealt with by any safeguards imposed at the time of the registration of a company.
There is at present no provision in the English company law as to the nationality of the directors, and there is nothing to prevent all the directors being aliens. In cases where the business of the company is to be carried on in this country and the directors are resident here, there seems to be no reason which would justify an amendment of the law in respect of the nationality of the directors. Difficulties arise here owing to the foreign residence of directors rather than owing to their foreign nationality, while in the case of companies asking for British protection abroad, the difficulties arise owing to the nationality of the persons interested in the company and not owing to their residence. One of the tests of the British character of a company which asks for British protection in foreign countries may well be that a certain proportion of the directors are British subjects, but there seems to be no legitimate objection to the directors of a British company carrying on business in this country being aliens.
So far as administration in this country is concerned, no difficulty would arise owing to the registration in England of a company with foreign capital for the purpose of carrying on business both in this country and abroad and having alien directors resident here, but there might be objections to granting British protection abroad to a company of this character. Different considerations would accordingly arise according to whether a company was to carry on business in this country alone or both in this country and abroad, and it seems impossible to make any such discrimination in British company law.
It is accordingly submitted that the circumstances which cause difficulty abroad, owing to the existence of companies which are British only in the sense that they are registered here, are essentially different from those which are objectionable in this country, and that they should therefore be dealt with by regulations as to the conditions on which British protection to afforded rather than by any amendment of the British company law,
Way
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1913
17 July
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SA
HONG KONG
28771
Ordt no 15 of 1913
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