CO129-557-9 British protection of companies in China 26-3-1936 - 27-2-1937 — Page 47

C. O.

Mr.

Mr.

Mr.

Sir C. Parkinson.

Sir G. Tomlinson.

Sir C. Bottomley.

Sir J. Shuckburgh.

Permt. U.S. of S.

Parly. U.S. of S.

Secretary of State.

DRAFT.

FURTHER ACTION.

47

of those persons having authority to sign

on behalf of the company, at least one-half

of the subscribers of a private company,

of the Directors and of the Committee of

Management, shall be British citizens or

subjects or nationals of a country under

British protection or Mandate. The above

requirement as to nationality shall also

be fulfilled by at least two-thirds of

those persons with authority to sign on

behalf of the company, being personnel of

branches or agencies in China. The capital

must be effectively owned, up to 35 per cent

at the least, by British subjects".

It is felt that it is not possible

to place any hard and fast restrictions as

to nationality on the shareholding of

public companies, but in practice this might

not matter, as those organisations which are

mainly concerned are private companies.

The shareholding of private

companies is already restricted by law, the

number of members being limited to fifty.

It is therefore possible to insist that at

least a majority of the shareholders and the

greater part of the capital of such

companies operating in China should be

British.

It is proposed that Article 194 of

the Order in Council dealing with the

control of China companies should be repealed

and replaced by an Article following the

precedent already established by Article 200

on the subject of companies limited by

guarantee.