CO129-423 - Governor Sir May - 1915 [7-8] — Page 324

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Objects and Bensons.

This Bill is complementary to the China Companies) Order-in-Council, 191, and the joint object of these two enactments is to increase the control over Hongkong com- panies which carry on business in China.

These companies fall into two classes, ir.. compunics which are managed from Hongkong, und companies which are tonnagel from some place in China. The former class are termed in the Order-in-Council and Biti "Hongkong China Companies", and the lutter class are termed “China Companies".

In the case of companies which are managed from Hongkong, the territorial jurisdiction of the Colonial Government atul Courts enables an effective control to he exercised over the company through the persons of its directors and officers here, whatever their nationality. In the case, however, of companies of the second class, clie directors and officers of which are resident outside the Britiel Dominious, there is no effective control over the company nuless some at least of the directors and officers are of British nationality, because the jurisdiction of the Supreme Court for China is in general contined to British subjects and protected persons. It is this difficulty which has led to the introduction of the above Onder-in-Comcil and this Bill,

The solution which has been adopted is to require that Hongkong companies which are managed from some place in Chion shall have connected with them a certain number of British subjects on whom a personal control can be exercised, and to provide that the shares in any such rom- pantes which are limited by shures will be fully paid up within three months after allotment. The exact provisions in the case of companies limited by shares are that the majority of the directors, and the auditors, nimst be British subjects, that no person other than a British subject shall be appointed to wet within the limits of the Order-in-Concilies liquidutor of sneb a company, or as receiver or messager ou behalf of the debenture holders, except with the station of the Court, and that no shares shall be issued except either us fully paid up or upon the term that the shares shall be fully paid up within three months after allotment. The provision as 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 ense of companies limited by guarantee, the provisions are that no steh company shall be allowed to operate without the con- sent of the Minister, who may as a condition of this consent require that no person other than a British subjret slnl be member, or that any member who is not British subject shall give security for insuring the pay- sent of the amount for which he would be liable under the guarantee.

The Order-in-Compeil also provides that the jurisdiction ranferred by the Hongkong Companies Ordinances upon any Court shall within the limits of the Onder-in-Council be exercived by the Supreme Court for Chite, and that that jurisdiction shall, sabject to the provisions of the Order, be exercised in conformity with the provisions of the Hongkong Companies Ordinances. The Under-in- Council and Bill together provide that in all matters relat- ing to a Hongkong Chin company the jurisdiction of the Supreme Court of Hongkong sud of the Supreme Court For Chinn shall be concurrent and mutually auxiliary, aud provisions are made for transferring procecilings from oue Supreme Court to the other.

At the same time provision is made for the establish- ment of a Register of companies at Shanglini, where all documents relating to China companies will be filed and fees paid.

J. H. KEMP,

Alluring General,

Last

1915

HONG KONG

40878

C.O

320

40873

RECE

Rrd 3 SEF 15

Anglo. Germen War.

Encloses Translations & paraphrases of

Los prorious Paper. Code Epher Halegrams Exchanged but.

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Gomer the

Dupl ODC. & lept is,

Next subsequent Paper.

Y/ 2179

The local situation remains unchanged

Duplicats Boo

(8196) W131,086-15. 45,000. 12/18. E.W. (107,039)

.. 37,997–51. 45,000, 11/24.

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