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HONGKONG LEGISLATIVE COUNCIL
The Companies Ordinance
THE ATTORNEY-GENERAL moved the first reading of a Bill intitulerl, An Ordinance to amend further the law relating to Companies.
The
Objects and Reasons attached to the Bill state:
1. The object of this Bill is to intro- duce into the Companies Ordinances, 1911-1915, some amendments which experi- ence has shown to be advisable, and to bring the law of the Colony into con- formity with the China (Companies) Amendment Order in Council, 1919, which was published in the Gazette of the 30th January. 1920.
2.- (Tause 4-Articles of association must be printed and it is more convenient that the memorandum of association should also be printed.
3.-Clause 9.—(a). In the case of a company taking exactly the same name as that of a company which has been dis- solved or is in course of being wound up, the inclusion of the year of its incor- poration in the name of the new com- pany will distinguish it from the old company.
The
(c) The amendment removes any doubt as to the meaning to be attached to the word"executed."
B.-Clause 8. (a). It is thought desir. able that the names of two principal offi- cers of the company should be printed on all trade circulars and business lettera on which the name of the company ap-
pears.
(b) The Chinese characters prescribed at present for China companies do not convey the meaning intended.
(c) The present penalty clause for Section 84 refers only to sub-Section (1) (a) of the section. The new sub-section now proposed is general.
(d) This amendment is consequential on the above amendments.
9.-Clause 9.-It seems unnecessary to- require private companies to lay profit and loss accounts, balance sheets and re- ports before a general meeting, or to re- quire them to circulate balance sheets and reports to the members. Section 27 of the principal Ordinance expressly pro- vides that privato companies need not file profit and loss accounts and balance sheets.
10. - Clause 10.-The amendment pre- vents a company, which has never been capable of doing any business, from re- maining on the register for more than
one year.
(b)-At present a company which re- gisters with a name too nearly resembling
It is considered that no use- that of an existing company cannot be
ful purpose is served by keeping on the compelled to change its name. amendment gives the Registrar of Com-register a company which fails to com- panies power to compel such change.
mence business within a year of its in- (c) In the case of a China company
corporation. the British Minister, as defined by Sec- tion 2 of Ordinance No. 31 of 1915, is the proper person to approve of the change of name.
4.-lause 4.-Sealed copies are used in this Colony in the place of office copies. 5.-'lause 5.-The law at present does not provide for the registration of the statutory declaration, although it should form part of the records of the company.
6.- Clause 6.-For the protection of shareholders and the public it is advis- able that any communication subject to which the auditors' report is made should be filed with the Registrar of Companies so that it may be available for inspec-
tion.
7.- Clause 7.—(a). The amendment obviates the necessity for a statutory de- claration being filed each year.
(6)-The amendment removes any doubt as to what is intended.
11.-Clause 11.-In the absence of these particulars it is practically impossible to trace Chinese owners of shares, the result being that they escape from any liability which may attach to their
shares.
12.-Clause 12.-A prescribed form is un- necessary. It is more convenient that the verification should be to the satisfaction of the Registrar of Companies.
13.-Clause 13.-This gives the Gov- ernor power to alter or add to any of the forms or fees in the schedules to the principal Ordiance.
14.-Clause 14.-In the winding up, of China companies or Hongkong China companies it might become necessary to appoint more than one official receiver in
be done.
.
The amendment enables this to
15.-Clause 15.-Creditors and contri- butories can always inspect the account
HONGKONG LEGISLATIVE COUNCIL
in the Official Receiver's Office, and it seems sufficient to publish a summary of the account in the Gazette.
16.-Clause 16.-This amendment is ren- dered necessary by the amendment of Section 217.
17.-Clause 17.-It is more convenient that all moneys in the Companies Liqui- dation Account at Hongkong should be in the hands of the Colonial Treasurer.
18.-Clause 18. This amendment is made in order to render it clear that the fees referred to in Section 223 are for documents prepared, as well as certified, by the Registrar. The fees for certifying documents prepared outside the registry appear in Clause 22.
19. Clause 19.-This amendment is con. sequential on Clause 13.
20.-Clause 20-(a) It is unnecessary to prescribe a time.
(b) A prescribed form of certification is unnecessary.
21.-Clause 21.-This gives the Governor power to prescribe certain forms.
22.-Clause 22. These fees are consid- ered reasonable. Some of them were not provided for, because, apparently, the documents and work in respect of which they are charged were not contemplated. The only fee which needs explanation is that for initialling alterations. Its object is to ensure that correct copies are submited for collating and pertifying In one set of documents, which was sent to the Registrar of Companies to be certified, over 1,500 alterations had to be
initialled.
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25 and 26 of the Bill. They are an attempt to obtain a fuller control, by the British authorities in China, over com- panies which are registered here but which carry on all their business and have all their assets in China. The original China (Companies) Order in Council provided that such companies must have A majority of British directors, but it was found that that did not give a suf- ficient control, because directors might be resident outside China altogether and so be out of the jurisdiction of British authorities in China. The recent Order provides that a person who exercises the general or substantial control of the com- pany must reside in China, and must be a British subject, thus giving the British courts in China sufficient jurisdiction over such companies. As the company is registered here, and as the British courts In China exercise jurisdiction in accord- ance with our Ordinances, it is necessary to introduce here similar provisions to those of this Order in Council. There has been considerable delay in intro- ducing these provisions here, It Was due to the discussion of the effect of the recent Order in Council both with the authorities in China and those in the United Kingdom. There was a certain amount of inconvenience and alarm at the time, but I think that the in- convenience has
and disappeared. things have settled down quite quietly, of other amendments in the Companies under the Order in Council. A inmber Ordinance have been collected and are now embodied in this Bill.
I do not
think, I need, at this stage, go into them
fully; they are most of them matters of 23.-Clause 23.-The company is not in detail. The Bill was referred to the existence at the time that this notice has Chamber of Commerce on two occasions. to be sent. The promoters are, there. On the first occasion, we adopted all the fore, the proper persons to send it.
proposals of the Chamber. One was 24.-Clauses 24, 25 and 26-Clauses 25 that which appears in paragraph (a) of aud 26 contain the provisions of Articles Clause to the effect that a company 3 and 4 of the China (Companies) must have the names of two principal Amendment Order in Council, 1919, and officers printed on all trade circulars, trade Clause 24 makes a necessary consequen-catalogues, show cards, and business letters on tial amendment.
which the name of the company appears. The 25.-Clause 27-Clause 27 of the Bill Bill does not specify what principal officers, introduces the provisions of the Com-but gives the company a certain discre- panies Act, 1913.
tion as to which two they would like to place on their circulars. Clause 15 is also amended on the suggestion of the Chamber of Commerce and provides that the liquidator's account in a company's winding-up need not be printed and circulated to all the shareholders and
THE ATTORNEY-GENERAL said--The reason why we have to introduce this Bill is to introduce here the provisions of the China (Companies) Amendment Order in Council, 1919. The provisions appear in Clauses
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