ENG-1978 — Page 54

26

INDUSTRY AND TRADE

The Companies (Amendment) Ordinance 1978, which came into force on July 7, 1978, implemented several recommendations of the Second Report (1973) of the Com- panies Law Revision Committee. These included: the extension of the power to dispense with the word 'Limited' in the name of companies about to be formed to companies already registered; the protection of interests of minority shareholders; and the exemption of solicitors, professional accountants, stock exchange members and other partnerships of a kind prescribed by the Governor in Council from the limitation on the number of partners imposed by the principal ordinance.

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, 182 such companies were registered and 60 ceased to operate. At the end of 1978, 1,131 com- panies were registered from 50 countries, including 291 from the United States, 148 from Britain and 130 from Japan.

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 Companies Ordinance or the Fire and Marine Insurance Companies Deposit Ordinance. In addi- tion to the filing of annual accounts, these ordinances require deposits to be made with the Registrar of Companies, unless the company is exempt. This exemption depends on the obtaining of a certificate from the insurance division of the Department of Trade in London, stating that the company is authorised under the Insurance Com- panies Act 1974 to carry on insurance business in Britain or – in the case of fire and marine insurance maintaining similar deposits elsewhere in the Commonwealth. There are 330 insurance companies, including 163 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.

J

-

From February 1, 1978, all insurance companies also had to comply with the provi- sions of the Insurance Companies (Capital Requirements) Ordinance 1978. This ordinance restricts the commencement of life, fire, marine or motor vehicle insurance business to companies formed or registered under the Companies Ordinance which have an issued capital of not less than $5 million fully paid up in cash. Companies which, prior to February 1, 1978, had met the then existing statutory requirements for the carrying on of those classes of insurance business, but had not yet commenced to carry on such business, and companies and members of Lloyds fully authorised to carry on similar lines of insurance business in Britain are, however, exempt from the restrictions of this ordinance.

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

Bankruptcies and Liquidations

In Hong Kong, the number of business failures leading to formal insolvency proceed- ings in court is always comparatively small in relation to the total number of businesses closing down. During the year, there were 43 petitions in bankruptcy and 94 petitions for the compulsory winding-up of companies. The court made 41 receiving orders, two administration orders, and 71 winding-up orders. As in past years, the Official Receiver