ENG-1975 — Page 52

INDUSTRY AND TRADE

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One amending ordinance is the Companies (Amendment) (No. 4) Ordinance 1974, which was enacted in December 1974 and came into force on October 1, 1975. This ordinance was based on recommendations in the second report of the committee relating to company accounts and directors' reports. It brings the accounts provisions broadly into line with those now in force in Britain and requires directors' reports to give much fuller information about their companies' affairs. Other items of legisla- tion based on recommendations in the committee's reports remain to be dealt with.

During the year the Companies (Amendment) Ordinance 1975 and the Companies (Amendment) (No. 2) Ordinance 1975 were enacted, both of which increased the various fees payable in the Companies Registry. On incorporation a company now pays a registration fee of $300 plus $4 for every $1,000 of nominal capital. In 1975 there were 4,170 new companies incorporated-398 less than the total incorporated in 1974. The nominal capital of new companies registered during 1975 totalled $1,824 million-27 per cent less than the previous year. Of the new companies, 63 had a nominal share capital of $5 million or more. During the year 1,110 companies in- creased their nominal capital by amounts totalling $3,942 million, on which fees were paid at the old rate of $2 per $1,000 up to February 26 and $4 per $1,000 from then on. At the end of 1975 there were 38,985 local companies on the register compared with 35,416 the previous year.

Companies incorporated overseas are required to register certain documents with the Companies Registry within one month of establishing a place of business in Hong Kong. Only small filing fees are payable in such cases. During the year, 57 such companies were registered and 35 ceased to operate. At the end of 1975 there were 892 companies registered from 46 countries, including 228 from the United States, 112 from Britain and 99 from Japan. Usually for tax reasons, many non-local companies incorporate a subsidiary in Hong Kong in preference to operating a branch office.

All insurance companies wishing to transact life, fire or marine insurance business in Hong Kong must comply with the provisions of either the Life Insurance Com- panies Ordinance or the Fire and Marine Insurance Companies Deposit Ordinance. In addition to the filing of annual accounts, these ordinances require deposits to be made with the Registrar of Companies, unless the company qualifies for exemption. This is dependent on obtaining a certificate from the insurance division of the Depart- ment of Trade in London, stating that the company is authorised under the Insurance Companies Act 1974 to carry on insurance business in Britain or in the case of fire and marine insurance-by maintaining similar deposits elsewhere in the Common- wealth. There are altogether 272 insurance companies, including 104 local companies, transacting such business in Hong Kong. The approval of the Registrar General must be obtained for transacting motor vehicle third party insurance business.

The Companies Registry also deals with the incorporation of trustees under the Registered Trustee Incorporation Ordinance, and with the registration of limited partnerships and money-lenders.