Bills of Exchange
The Commission's 1982 report recommended that the Bills of Exchange Ordinance (Cap 19) should be amended to make it clear that where a person's signature appears on a cheque only as a composite part of his company's signature, that person should not be personally liable. It also concluded that there was no need to amend Cap 19 in respect of the time within which notice of dishonour of a cheque must be given.
The report recommends that bankers should consider the desirability of advising their corporate clients that the only sure way in which a signatory can avoid personal liability on a dishonoured company cheque under Cap 19 is by adding to his signature the words "for", "on behalf of" or "for and on behalf of" and the company's name.
The report also recommends that bankers should consider drawing their corporate clients' attention to the effect of section 93 of the Companies Ordinance (Cap 32): failure to set out the company's name fully or accurately or omission of the Chinese characters (有限公司) in the company's Chinese name could result in the signatory's personal liability on the cheque.
The Bills of Exchange (Amendment) Ordinance made the appropriate legislative changes in 1983.
|Press Release (PDF) (MS Word)|
|Report (PDF) (MS Word)|