CO129-557-9 British protection of companies in China 26-3-1936 - 27-2-1937 — Page 3

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as either necessary or, in fact, possible to lay

down such restrictions as regards the share-

holding of public companies, but the existing

restrictions on the shareholding of private

companies renders them amenable to regulation,

and the companies which have caused most trouble

have, in fact, practically all been private

companies. It would be easy to insist that the

majority of shareholders and of capital in such

companies should be British in the case of

companies operating in China, this in addition

to the other requirements of British companies

operating elsewhere.

The new

It is suggested that Section 194 should

be replaced by a section dealing with all

British companies operating in China.

section should follow the lines of Section 200.

which deals with the operation in China of

companies limited by guarantee, i.e. a necessary

condition shall be the consent of the Minister.

It is argued in favour of this proposal that it

puts adequate control on a legal basis, and yet

leaves room for elasticity in operation,

discretion resting with the Minister, and also

obviates the difficulties which have hitherto

been experienced as regards companies incorporated

elsewhere than in Shanghai. Further, the

difficulty of the conflict of jurisdiction with

the Chinese authorities would disappear, as

those companies over which His Majesty's

Government would not wish to assume jurisdiction

under this provisions

would not, in the operations of the revised

Section 194, be permitted to operate in China

at all.

The