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means
I would remind you that originally, and not very long ago, in the days of our grandfathers, all public companies were regarded as partnerships. Every share- holder was practically a partner in the company, and when the concern became insolvent every shareholder was liable to the utmost penny of his effects for the debts of his company: Then came legislation which alleviated that, because it was found to be unfair, and we had then the beginning of the limitation of liability which was necessary to allow a man to know when his liabilities would stop. That is the basis of the meaning of the word limited, but I submit it has now got a totally different meaning. In the understanding of ninety-nine men out of 100, when they see the word limited after the name of a company in China, they do not regard it merely as a company with a limitation of the shareholders' liability, but that behind that company is the careful ruling and dragooning of the British law. And if they are dealing with such a company, they know that the secretary, directors and
* Limited officials have got to behave themselves according to British law. out here, to the non-Briton, a company looked after and cared for by British law.
That state of things went along happily until it was found that the very fact of limited being attached to a company's name gave it a stamp of worth, and sundry persons brought from all places of the world established companies and behaved themselves in various improper ways which earned for them disgrace, and because of the use of the word limited," when the company was wound up, the Chinese said that was a British company. That went on until the committee of the Stock Exchange managed to ameliorate conditions in such a way that now we have to have a majority of British directors in a British company, and as soon as the war was finished further legislation provided that the management must be British. and the agents, instead of being of a different nationality, keeping the company's books in premises which could not be touched by the British officials, have now to be British themselves. That is very satisfactory, but it seems to me that one step further is required, and I trust this association will take that step.
There is no patent on the word limited,' and what I want to point out is that I have heard there is an we should try to extend the word into British limited.' objection to this that it would cause a lot of trouble, changing articles, &c., but I think the Order in Council could be so worded that after a certain date all China companies would automatically adopt the new style without the alterations in the articles suggested. The other day I went through the Hong List and took down the names of companies who were certainly not British and were using the word
limited.
Mr. Anderson then proceeded to quote from the Hong List the names of a number of companies, not of British nationality, using the term limited."
•
"I am encouraged in my view by the fact that shortly after my suggestion had been submitted to the sub-committee, there appeared in the China Press chapter and verse of a bill which was introduced on the 11th July, 1919, in the House of Representatives at Washington. which provides for registration of American And they are defined in exactly the same way as I would ask companies out here.
Section 2 of the you to get permission to have British companies defined here. bill reads:
That any number of persons, not less than three, a majority of whom shall be citizens of the United States of America, desiring to become incorporated under this Act, shall subscribe and acknowledge articles of incorporation, which must contain: (1) the name of the corporation, which shall end with the legend 'Federal Inc., U.S.A." (The use of which legend as the part of the name of any firm, corporation or association engaged in inter-State or foreign commerce and not chartered under this Act, is hereby prohibited): (2) the location of its principal office and the place where its principal business is to be transacted: (3) purpose for which it is formed: (4) the amount of its capital stock and the number of shares into which it is divided.'
Gentlemen, the Americans have just got a step ahead of us. They are doing what I propose we should do. If you do not think that there is as yet any necessity for this step, I would point out that when it is too late and the grievance becomes I have no irksome it will be more difficult to take the step which I now suggest, seconder, but I hope somebody will second this.
The Chairman : Will any member second the resolution?" Canton (Mr. Eager): "If I may be allowed I would like to second the resolution. The matter is one which I have tried to agitate to some extent in Hong Kong, I
13
have received letters from manufacturers in England enquiring who certain people were who they believed were British companies and had established themselves as such. I have very great pleasure in seconding the resolution because I think that such a thing would tend to do away with misunderstanding."
Shanghai (Mr. Burkill): I would like to explain that we were sympathetic towards Mr. Anderson's resolution, but we were so appalled at the extraordinary amount of meetings which would have to be called to make the change that we felt it was a step which would have to be gone into thoroughly before it was taken. Accordingly we did not include it in the agenda. I don't know whether an Order in Council could make the change automatic and do away with amendments of the Articles of Association, Agreements, &c. If that could be done by Act of Legislation then our chief objection to the change would fall to the ground. We were quite sympathetic and appreciated Mr. Anderson's point of view, but some of us know the difficulties of getting meetings to make such changes as would be required."
Mr. Brett: I should like to say, as another member of the sub-committee responsible for the agenda, that I support what Mr. Burkill has said. I wonder whether it would be possible not to take any immediate action in this matter and ask for an Order in Council, but make it a resolution to the effect that this was something which ought to be studied by the Chambers and one upon which legal advice ought to be taken. We ought to find out what particular steps could be taken."
Mr. Anderson: Could we not meet on the point by the addition to the resolution of words if such can be done without a cumbersome system of meetings? In other words, if the change can be done automatically, will that do?
Mr. Brett: "Yes.'
Mr. J. T. Pratt:
I believe it is perfectly possible to draw up an Order in Council which would obviate the necessity of calling extraordinary general meetings. 1 believe it possible to draft arorder which would create little, if any, inconvenience.
Hankow (Mr. Fraser): I think this refers to British companies registered in Hong Kong.’
The Chairman: No, companies in China.**
Hankow (Mr. Fraser : "Well, London companies, British companies are they to carry the title, too?"
Mr. Anderson: "I meant companies registered out here because I thought it was going rather too far afield for us to sit here and legislate for the whole British Empire. If other Chambers of Commerce in other parts of the world thought fit to press for the same legislation, it would be necessary to do it through the Imperial Parliament."
+
Hankow (Mr. Fraser): "I think we should go slowly, if we are going to have anything which would differentiate between British companies-between those which had head offices in London and those here. Has there been no question of Chinese names using a certain character at the end of the name to signify British company?
Mr. Girardet: There was some argument about it some time ago, and I remember Mr. Fox bringing up the point. An attempt was made to compel all British companies to use the words Ying Shang.'
Mr. Brett: There was no attempt made to compel, but it was suggested." The Secretary: Referred to on this point, Mr. Gull said: "My information is that a circular was sent round urging the addition of these Chinese words and the recommendation was duly made to members, but nothing happened as a consequence and the matter was left."
Mr. Humphrys "I think the addition of the Chinese characters hardly makes Mr. Anderson's point. Because that is giving information to the Chinese as to whether a company is British or not, whereas he means to give the information to In that case, the Chinese other people as to whether a company is British or not. characters would not be sufficient. I would suggest an amendment to Mr. Anderson's resolution stating that the conference agrees in principle with the idea and instructs the secretary of the association to find out what procedure will be necessary and what possible difficulties could be raised.')
The Chairman: "If you agree in principle with the idea which Mr. Humphrys has put forward, I think perhaps it would be useful if an amendment was formulated in order to put the thing on a proper basis."
Mr. Humphrys I propose that the conference agrees in principle and believes it is desirable that legislation should be enacted whereby British he appended to the names of all British companies registered in Hong Kong. Might I suggest that
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