CO129-395 - Public Offices - 1912 — Page 201

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forwarded with your letter of the 28th August 1911

(33267/11) that the directors of a Shanghai company

should either be British subjects or should file

with the Registrar an acknowledgment by the Court

of their nationality that in any proceedings against

them such Court will enforce the British provisions re-

lating to Shanghai companies in the same way as if such

proceedings were being taken in the Supreme Court

for China. Some such provision

appears to the Board

to be necessary in order to enable the Supreme Court

to enforce the provisions with regard to companies

which are contained in the Hongkong Companies

Ordinance, but it is suggested that it might be

sufficient to require that a majority only of the

directors should be British subjects. The matter is

one, however, on which some provision must be made,

not only on the incorporation of the company but also

to meet any subsequent changes in the directorate.

It can easily be dealt with on the incorporation of

a company by providing that the Registrar shall not

issue a certificate of incorporation until he is satis-

fied on the point. There may be some difficulty in

:

framing a satisfactory provision to meet the case of a

change in the directorate after incorporation, but I am

to suggest that failure to comply with the requirement

might be made a ground on which a winding-up order could

be made or on which the company could be struck off the

Register, unless the requirements were complied with

within some fixed time after notice had been given to

the Company by the Registrar.

A suggestion was also made that all shares in

Shanghai companies should be fully paid up in order to

avoid the difficulty which might be experienced in re-

covering unpaid calls from shareholders who are not

British subjects. This might be effected by providing

that all shares should be fully paid up within a certain

fixed time after allotment, and that in the event of the

shares not being so paid up they should be forfeited.

At the expiration of the period allowed for payment the

directors might be required under a penalty to forward

to the Registrar at Shanghai a return signed by the com-

pany's auditors showing details of the amounts received

and the shares forfeited.

If any such provision is made for requiring that

the shares of Shanghai companies must be fully paid up,

it

framing