TNAG-1645-FCO40-2292-Company-law-reform-in-Hong-Kong-Companies-(Amendment)-(No.-2-1987 — Page 86

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have a right to vote. We therefore recommend that section 114C

be amended to bring into line with the corresponding Section 372

of the Companies Act 1985 in Britain i.e. by exempting all companies

not having a share capital (which in practice covers all private

clubs incorporated as companies limited by guarantee*). We would

point out that, if this recommendation were implemented, the members

of any particular company limited by guarantee who wished to have a

right to appoint proxies would be able to do so by providing

accordingly in their company's articles of association.

4.14

With regard to Section 157A, Members noted that the section

already has its own "exemption" provision in subsection (1), which

provides that a motion for the appointment of two or more directors

by a single resolution cannot be made unless a resolution that it

shall be so made has first been agreed to by the meeting without any

vote being given against it. However, Members again thought that this

provision was not appropriate for companies limited by guarantee.

It

was thought that the provision had been designed to prevent attempts

to force through groups of directors of commercial companies and was

an unnecessary complication in the running of companies limited by

guarantee. We therefore recommend that Section 157A be amended by

excluding companies not having a share capital from its provisions,

in addition to the existing exclusion of private companies.

* The Companies Ordinance does contain provisions for the incorporation

of companies limited by guarantee and having a share capital but these

are extremely rare in practice; according to our researches, all the

private clubs which have been incorporated under the Companies Ordinance

have been incorporated as companies limited by guarantee and not

having a share capital.

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