CO129-369 - Acting Governor May Governor Sir Lugard - 1910 [10-11] — Page 523

P Y.

His Excellency,

Enclosure 4.

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201

052

000 an tel soy ti mali ovaa Litw soy dadd Taengua

airá to moltoibattut odt tooîte £12w dold

.omod masíð baan s

«zotammuab b .# (.53)

I think I can best assist in dealing with

JA

the difficult question which has arisen in consequence of my

dgment in connexion with Shanghai companies by indicating

breadly the principles on which legislation should preceed, and

offering a few general remarks. I hesitate to express an epi«

-nion on the Attorney-General's suggested alterations in the

New Companies Ordinance, as I could not do so without consider-

-ing the whole of the somewhat bulky piece of legislation,

ich I have not time to undertake.

The principal difficulty of the question

árises from the fact that there are no special facilities given

to the Shanghai Companies to register under the Hongkong law.

t is necessary to make this position perfectly clear at the

tset. As I have indicated in my judgment, whay may be called

foreign companies" may register under the Companies Act, and

fobtain the benefit of it, if they fulfil certain conditions: the

principal being that the business, wherever its field of operation may be, should be "carried"on" in England, er under he Hongkong Ordinance, in Hongkong. Companies formed in Shan-

ghai come within this law, just as any other "foreign company". I leave the words "carry on" somewhat vague, because it has never been defined: but it is possible ti indicate what it means; if the board of directors met in Hongkong that would of

‣ be sufficient. The peculiarity of "Shanghai companies" at they do not, nor is it very practical to suppose that could, fulfil this condition. The only thing they do, and can do, is to have a technical "registered Office" here, and

his I have held to be insufficient. In the following remarka I use the term "Shanghai Company* as a generic name for companies which promoters desire to form in the Treaty Ports: and a "Manila company" as a convenient type of foreign company; this is practical as well as convenient, because companies trading in the Philippines are often formed and registered

here.

In