17817-1910-Supplementary-Bills-read-a-first-time--Companies — Page 108

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I.

MEMORANDUM

ON

THE DIFFERENCES BETWEEN THE PROVISIONS

OF

THE NEW COMPANIES BILL

AND

THE COMPANIES (CONSOLIDATION) ACT, 1908.

NOTE.

The following memorandum of the differences between the provisions of the Bill and those of the Companies (Consolidation) Act, 1908, of the Imperial Parliament, on which the Bill is based, refers specifically to every clause about which there is likely to be any controversy. Other changes are treated generally.

The sections in the Act, and the corresponding clauses in the Bill, are given at the end of each paragraph or sub-paragraph.

The changes have been made chiefly on account of the following:

(a.) The existence of the "Shanghai Companies".

(b.) Chinese language and customs.

(c.) Existing local law, courts, currency, etc.

MEMORANDUM.

"Shanghai Companies".

A great many of the companies registered in Hongkong are companies which transact all their business outside the Colony, Most of these companies have their head offices either at Shanghai or at Tientsin. They have no office here for the transaction of business, and their directors and officers and all their property are Under out of reach of the jurisdiction of the Hongkong courts. these circumstances, control over them is difficult, and it is found in practice that some of them are very dilatory and negligent in complying with the provisions of the law. In order to strengthen our control over these companies a number of provisions have been introduced into the Bill which do not exist in the Act because the difficulty has never become acute in the United Kingdom. Other provisions have been inserted in order to meet the convenience of these companies; these have been rendered necessary by the time which letters take to reach Hongkong from Shanghai, Tientsin, etc., and by the fact that different newspapers circulate in those ports. One provision, which is adopted from previous legislation, i.e.. Ordinance 16 of 1907 as amended by Ordinance 20 of 1909, is the result of a compromise between the rival claims of the Hongkong Government and the extraterritorial authorities at Shanghai to collect probate or estate duty on the shares of these "Shanghai Companies". All the special provisions referred to are enumerated below.

**

(a.) Inspection of Register of Members.The Shanghai Companies have only a skeleton registered office høre, and consequently there is no one, strictly, who can "refuse" inspection. The Act provides a penalty only where inspection is “refused". The Bill provides the same penalty where inspection "cannot be obtained at the registered office with the exercise of a reason- able amount of diligence", Act, Section 30; Bill. Clause 31 (4).