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appointuent of a British managing director. The exact significanos of the acquisition of land in the British concession at ljankow is not understood. The holding of such land by a company would appar- ently tend to strengthen the hold of the British authorities over the company, but there may be countervailing objections which are not known to me. It is believed that the company referred to in this paragraph is the boong On Stemmahip Company Limited.
5. The other case is that of J.A.Vattis & Co.Ltd. It stated in the correspondence above referred to that this company were "endeavouring to repudiate the status of a China company and the obligations it entails; relying on the fact that the articles of association vested the control of the company in the board of directéem in London. Here again it does not appear in the corres- pondence how the control failed.
6. No doubt there were good reasons for amending the law, but as I ma ignorent of those reasons I am unable to discuss them. All that I can do at present is to point out certain other diffiou- lties to which the new Order-in-Council is given rise, and to put forward certain possible objections to the new legislation.
7. Several companies registered here have branches at Shang- bai. They are therefore Hongkong Chána companies. Some of them, though. mainly Chinese in character throughout, appear to be genuine Hongkong enterprises. An instance is the Singers Company Limited. The Shanghai manager must necessarily have a large amount of discretion and con- trol. Fossibly this company does not come within the terms of the 1919 Grder-in-Council, because the business at Shanghai can hardly be said to be the business of the company, though it may be an important part of the business of the company. Casas much an this suggest two observations. One is that where we have a réssonable amount of control through our territorial jurisdiction în Hongkong it seems to be consi sarily drastic to deand the personal control which would be given in in China by the appointment of a British managing director. The other
observation is that a company in such a case my well have reasonable
dowti
doubts as to its status. It may be advised that it is not a China company, but it has no means of testing the soundness of that advice except by inviting a prosecution in Shanghai,when it might be subject to heavy daily penalties.
6.
The objection that no means is provided by which a company can obtain a judicial decision as to its status under the Order would be met in the onse of "ongkong China companies if the British authorities in China would be prepared to agree not to apply for any penalty in respect of any default made while the company is án the hongkong register. The procedure then would be that if the Registmr of Companies at Shanghai were of opinion that a Hongkong China com- pany had become a China company under the new Order, he would set in motion the machinery for transferring the company to the Shangbai register, and the status of the company could then be ascertained judicially by an appeal to the Supreme Court under section 3(5) of the Companies ordinance, 1915.
9. This consideration, however, would not apply to companies which are already on the Shanghai register, and it seems to be a grave objection to the order-in-Council that no means is provided by which China companies can obtain a juiicial decision as to their status in a matter which must often be a difficult question of fact, though no doubt some cases will be quite clear.
Even in some of those apparently clear onges, such as the *ing On Company (Shanghai) Limited, the other observation remains trus. Such a company may be a subsidiary company belonging to a bona fide Hongkong enterprise, and the territorial control here my be
ti quite satisfactory,
11.
Another class of company which may give rise to difficulty. is illustrated by the case of the Kwongtung Tramways Company Limited. which carries on a tramway undertaking at Canton. here the desira- bility of relying on the territorial juriadiction in Hongkong, and the personal juridiction ensured by the 1915 Order, is perhaps rein- forced by the consideration of the inconvenience of requiring such a company to be placed on the Changhai register. There is also the possibility that Chinese law might at some future time require the
Iogal
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