TNAG-1645-FCO40-2292-Company-law-reform-in-Hong-Kong-Companies-(Amendment)-(No.-2-1987 — Page 4

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This subject was more complicated than it had seen at first sight. The Sub-Committee concluded that the existing wording of section 80(2) (c) would present difficulties for an ordinary businessman in interpreting the Bills of Sale Ordinance and in deciding whether if a particular charge had been granted by an individual, it would have required registration under that Ordinance. To clarify the matter,

the Sub-Committee recommended

recommended that the present wording be deleted and substituted by "a charge on

a charge on a personal chattel created or evidenced by an instrument" with separate definition for "personal chattel".

'personal chattel". With regard to section 80 (2) (e), the Sub-Committee considered the term "book debts" extremely vague and subject to numerous exceptions. Various organisations, including the English Law Society, have recommended that this category of registrable charges be repealed. The Sub-Committee reached the same conclusion. In the event that Government should decide not to accept this recommendation, the Sub-Committee suggested that section 80(2) (e) be amended to make clear that it does not apply to charge on credit balance held by any person carrying banking business or the business of taking deposits.

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The Standing Committee recommends that section 80 (2) (c) and (e) be amended in accordance with the recommendations in the Sub-Committee's report. Consideration is being

being given by the Standing Committee to а further recommendation by the Sub-Committee that charges created by companies in favour of the Crown should also be subject to section 80 of the Ordinance.

III Proxies (section 114C of the Ordinance)

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Section 114C of the Ordinance introduced by the Companies (Amendment) Ordinance 1984, provides that any member of any company including a company limited by guarantee, entitled to attend and vote at a meeting of a company shall be entitled to appoint another person (whether a member or not) as his proxy who shall have the same right to attend, vote and speak as the member.

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Companies limited by guarantee are usually set up for charitable or social purposes and do not trade (with notable exceptions such as billiard halls) and do not have a share capital (except in very rare cases, totalling 8 in number). Many private clubs in Hong Kong adopt this form of incorporation and they find it

it rather unpalatable to allow members to appoint non-members as proxies to attend, speak and vote at general meetings.

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The Standing Committee, after consultation with some prominent private clubs, recommends that section 1140 be amended to exempt all companies not having a share capital