File No. 14716/2–3.
[Inclosure.]
Minister Rockhill to Consul Pontius.
American Legation,
Peking, China, June 22, 1908.
No. 1636.]
Sir: Your No. 377, of June 13, 1908, on
the subject of the status of the Tai Hong Co., has been
received. You inclose certified copy of the certificate of
incorporation under the laws of the State of Delaware, of this
company, and report that you are “informed” that all shares of
the company have passed to citizens of other (than American)
nationality. You ask five questions, which the legation answers
as follows:
1. Can a consular officer file the articles of
incorporation of a company if produced by other than a
duly accredited representative?
You should satisfy yourself that the certificate is presented by
the properly authorized agent or attorney of the
corporation.
2. Has a duly organized American corporation the right to
continue operation as an American concern after the majority
of stock has been disposed to other than Americans?
This depends upon the charter and by laws of the corporation and
the laws of the State (in this case Delaware) creating the
corporation. As a general rule, “the mere transfer of shares
between individuals does not affect the complete subjection of
the corporation itself to the Government which created it.”
3. What kind of documentary proof in this instance is
necessary in order to empower a local representative to
conduct business in the Tai Hong Co.’s behalf? For instance,
[Page 65]
I am Informed
that as Ing Kong is the president of the company, he is
fully empowered to act in its behalf; but as he has no
written proof that such is the case, I have refused to
recognize this contention.
The proof should be of such a character as to satisfy you of the
regularity of the appointment.
4. Admitting that there are doubts as to this concern being
at present a bona fide American corporation, has not this
consulate the right to demand documentary proof as to the
election of a president and secretary and their rights and
authority in the premises?
5. If Ing Kong now holds the shares of the company in his
name, has not this consulate a right to insist that some
documentary evidence to this effect be shown?
As the corporation applies to you for assistance as an American
juridical person, it is your duty to satisfy yourself that it is
entitled to such protection. This will best appear by an
examination of the charter and by laws, minutes, etc., which you
may properly ask to have submitted to your inspection. The facts
thus revealed should be reported to the legation if further
instruction seems desirable.
In cases of this kind something more concrete than mere
information is absolutely necessary to enable the legation to
reach a decision and the fullest possible statement of facts
should be furnished.
I am, etc.,
