CO129-462 - Governor Sir Stubbs - 1920 [7-10] — Page 102

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atatus of a 'China' company by Article 3 thereof, which is as

follows:-

"Where the general or substantial control of the

business of a company incorporated under the Ordinance is exercised by a person or persons ordinarily resident within the limits of this Order, such company shall, irrespective of the place at which the Board of Directors may meet, or of any other circumstances, be deemed to be a Com- pany of which the operations are directed and con- trolled from a place within the limits of this Order and shall be a China Company within the mean- ing of the China (Companies) Order-in-Council, 1915"

In paragraph 9 of Fis Excellency's despatch he deplores

the facts that, as he understands, "no means is provided by which

China companies can obtain a judicial decision as to their statusi

in a matter which must often be a difficult question of fact", I

understand from the whole of the despatch under consideration that

His Excellency considers that the judicial decision of any ques-

tion affecting companies incorporated under the Hongkong Com-

panies Ordinance including 'China Companies' should be obtainable

in the Supreme Court of Hongkong. Even if the matter of the most

convenient tribunal for the decision of questions affecting the

status, and liabilities, of a China Company were under consider-

ation for the first time it would, surely, be considered that on

questions of fact such as whether, or no, the substantiel control

of the business of a company is exercised by a person or persons

ordinarily resident in Chine, the Court best able to deal effect-

ively with the matter would be H.M.Supreme Court for China.

As to companies already on the Shanghai Register I foresee no great difficulty in enforcing the provisions of

Article 4 of the China (Companies) Order-in-Council 1919 which provides that:

"No person, other than a British subject resident

within the limits of this Order, shall act as managing director or in any position similar to that of managing director or shall otherwise exer- cise general or substantial control of the business of a China Company".

As to these 'Hongkong China Companies' which in accord-

ance with Article 3 of the new Order-in-Council have now become

'China Companies', the Registrar of Companies at Hongkong, in

writing