TNAG-1645-FCO40-2292-Company-law-reform-in-Hong-Kong-Companies-(Amendment)-(No.-2-1987 — Page 83

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4.6

In practice, however, it was soon discovered that the

operation of the new sections in so far as they applied to companies

This

limited by guarantee, was causing a good deal of concern.

unexpected problem arose from the fact that a great many, probably

the majority, of private clubs in Hong Kong are companies limited

by guarantee. Similarly, a number of professional and business

organisations are also companies limited by guarantee.

4.7

In October 1985, a leading local solicitor wrote to the

Standing Committee stating that a number of private clubs which

were incorporated as companies limited by guarantee were finding

it somewhat unpalatable to allow members to appoint non-members

as proxies to attend, and to speak at, general meetings. Several

members of the Committee were also aware from personal experience

that the requirement for appointment of directors to be voted on

individually was causing embarrassment for private clubs (A company

limited by guarantee does not come within the definition of a

'private company' and Section 157A therefore does apply to such

a company).

4.8

In November 1985, the Standing Committee wrote to a cross-section

of fourteen of the better-known private clubs incorporated as companies

limited by guarantee, asking whether they wished to comment on the

operation of Sections 114C and 157A or of any other provision in the

Companies Ordinance. The Committee also wrote in similar terms to

three of the better-known professional and business organisations

incorporated as companies limited by guarantee.

4.9

When the replies were received, members noted that, with

one exception, all the organisations which had replied were strongly

in favour of exempting clubs incorporated as companies limited by

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