:
En
-8-
Objrets and Reasons,
This Bill is complementary to the China (Companies) Order-in-Council, 191, and the joint object of these two emctments is to increase the control over Hongkong com- panies which carry on business in China.
These companies fall into two classes, ie, companies which are managed from Hongkong, and companies which are managed from some pince in China. The former class are teripal in the Orler-in-Council and Bill "Hongkong China Companies", and the latter class are termed "Chins Companies".
In the case of companies which are managed from Ilongkong, the territorin jurisdiction of the Colonial Government and Courts enables an effective control to be exercised over the company through the persons of its directors and officers here, whatever their nationality. In the ease, however, of companies of the second class, the directors and officers of which are resident outside the British Dominions, there is no effective control over the company unless some at least of the directors uud officers are of British nationality, because the jurisdiction of the Supreme Court for Chine is in general confined to British subjects and protected persous. It is this difficulty which Ims led to the introduction of the above Order-in-Council and this Bill.
The solution which bas beon Biopted is to requite that Hongkong companies which are managed from some place in China shall have connected with them n vertain number of British subjects on whom a persoual control can be exercised, and to provide that the shares in any such com- panies which are limited by shares will be fully paid up within three months after allotment. The exact provisious in the case of companies limited by shares are that the majority of the directors, and the auditors, must be British subjects, that no person other than a British subject shall he appointed to art within the limits of the Order-in-Council na linidator of such a company, or as receiver or musger on behalf of the debenture holders, except with the sanction of the Court, and that no shares shall be issued except either as fully paid up or upon the term ibat the shares shall be fully paid up within three months after allotment, The provision 88 to the shares is in order to avoid the difficulty of recovering calls from persons of non-British nationality in China. In the comparatively rare case of companies limited by guarantee, the provisions are tunt yo speli company shall be allowed to operate without the ron- sent of the Minister, who may as a condition of this cousent require that no person other than a British subject shall be a member, or that any member who is not a British subject shall give security for insuring the pay- ment of the amout for which he would be liable nuder the guantee.
The Order-in-Council also provides that the jurisdiction conferred by the Hongkong Companies Ordinances upou any Court shall within the limits of the Order-in-Council be exercised by the Supreme Court for Chius, und that that jurisdiction shall, subject to the provisions of the Order, be exercised in conformity with the provisions of The Orlor-in- the Hongkong Companies Ordinances. Conncil and Bill together provide that in all matters rolat- ing to a Hongkong Chins company the jurisdiction of the Supreme Court of Hongkong and of the Supreme Court for China shall be concurrent and mutually auxiliary, and provisions are made for transferring proceedings from one Supreme Court to the other.
At the same time provision is made for the establish- iment of a Register of companies at Shanghai, where all documents relating to China companies will be filed and fees paid.
ان
The opportunity has also been taken of making certain ajor amendinents in the law which are desirable. These "will be referred to specifically below,
Clause 1 is formal.
Clause 2 contains definitions, the definition of "China Company* **Hongkong China Company", and "British Company", being taken from the Onder-in-Council, The nomenclature of the Order-in-Council has son departed from in one respect, namely, in substituting the term " The Companies Ordinances" for the term "The Ordinance".
Clause 3 proposes to establish a Register at Shangbai and provides that all acts done by or before the Registrar at Shanghai shall be of the same validity as if they had been done by or before the Registrar of Companies in Hongkong. It also directs that all documents required by the Companies Ordinance to be filed with the Registrar of Companies shall in the case of a China Company be flad with the Registrar at Shanghai, and that a copy of all sucli documents sinull in the case of a Hongkong China Com- pany, as defined in the Bill, be filed with the Registrar at Shanghai. It also provides that all fees which a company Es required to pay to the Registrar of Companies shall in the case of a Chiun Company be paid to the Registrar at Shanghai.
Chase 4 deals with the question of transfer from one Register to another, either on notier by the company concerned or ou the motion of one of the two Registrars, and provides for an appeal to the Supreme Court from any onder of transfer.
Sub-clause (6) of this clanse is jusorted in order to bring the notices referred to within the term of the Table of Fees in the First Schedule to the Companies Ordinance, 19LE.
Clause 5 is complementary to corresponding provisions in the Order-in-Council, and the two sets of clauses taken together are intended to make the Supreme Court of Hongkong and the Supreme Court for Chins of concurrent jurisdiction, and auxiliary to each other, in all matters relating to Hongkong Company, as defined in the Bill. The clause also empowers the Supreme Court of Hong- kong to enforce orders of the Supreme Court For China in all matters relating to China Companies.
Clause 6 enacte certain amendments in the Companies Ordinance, 1911. Most of these are self explanatory aml are necessitated by the new order of things futroduced by the Onder-in-Council. The others are shortly referred to below.
Sub-clause (1) of clause 6 repeals a clanse which will mit bu necessary when the Supreme Court and the Supreme Court for China are auxiliary to each other.
Sub-clause (2) of clause & repeals three sub-clauses which are unnecessary, notice of the situation of the registered office being sufficioutly, and more suitably, dealt with in section 63 of the Companies Ordinance, 1913. There is no precedent in the Companies (Consolidation) Act, 1908, for these three sub-clausea.
Sub-clause (3) of clause 6 is intended to prevent the improper use of the word "British" in the names of companies. The proviso is wilded because all China Companies with have a real and substantial British chame.
ter.
Sub-clause (6) of clause 6 is intended to assist in mark- ing the distinction between China Companies and other limited companies, established under the law of a foreign state, which are uos subject to British control in China.
Sub-clause (7) of clanse 6 is intended to correct a slight artor which crept into the Companies Amendment Ordi- unpee, 1913. This point is further dealt with in clause 8 (1).
Sub-clause (10) of clanse 6 is an attempt to impose more stringent conditions on the commencement of business by a new company in order to prevent fraud.
314
1
No comments yet.
Private notes are available after approval.