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6.
10. It should further be stipulated that compliance
with these conditions must be show to the satisfaction
of the Ambassador, who however would have discretion to
allow a company reasonable time to correct an unintentional
contravention. A precedent for this will be found in the
Consular District General Regulations which require
shipping interests to satisfy the Consul annually that
their ships are owed by British subjects and comply with
other stipulated conditions. And finally the requirement
an to the Ambassador's licence would be enforced by the
usual penal clause, and the operation of a compony
without it would be a ground for compulsory winding-up
by the Court.
11. The advantages of this system are that while
the control of companies would remain on a legal basis,
1.e. the conditions for their recognition would be laid
dow in the law and penalties imposed by the Courts, the
role allotted to the executive authority in the person of
the Ambassador would allow of elasticity in its operation.
All the latitude necessary could be given in deserving
cases, but the executive would be armed with the power
to stop obvious abuses without undue delay, and would
not be in the impossible position of having to prove a
negative as in the recent case of the Guaranty Under-
writers of China Limited,
12. The proposed legislation would also obviate
the technical difficulty of refusing recognition in China
to a company holding a certificate of incorporation
issued, say, in London. In the case of the Centrosojus,
for instance, we would not say that it was not a British
company but merely that it was not permitted to
/operate