Amendment to Companies Ordinances
Introduction
1. The Companies (Amendment) Ordinance 2003 ("the Amendment
Ordinance") was passed by the Legislative Council of
HKSAR on 2 July 2003. According to the Commencement Notice
published in the Gazette on 12 December 2003, the Amendment
Ordinance will come into operation on 13 February 2004, except
clause 67 [sections 158C(1)(a) and (b)] which will become
operative at a later stage.
Major Changes
Formation of Companies
2. Amended ordinances now permit the formation of a company
by one or more persons (Section 4(1)) and prohibit the incorporation
of a company limited by guarantee with a share capital (Section
4(4)).
Change of Company Name
3. A local company is required to give notice of the change
of name within 15 days after the passing of the special resolution
changing its name in a specified form (Section 22(1A)). The
filing of a printed copy of the special resolution in relation
to the change of name with the Registrar of Companies ("the
Registrar") is not longer required.
Return of Allotments
4. Section 45 has been amended to shorten the period for filing
a Return of Allotments (Form SC1), the relevant contract and
the Return of Particulars of a Contract Relating to Share
Allotment (Form SC5) from 8 weeks to 1 month. In addition,
the requirement to report the occupations or descriptions
of the allottees in Form SC1 has been deleted. To simplify
the filing requirement, a certified copy of the contract will
be accepted in lieu of a duly stamped contract and a Form
SC5 is no longer required to be adjudicated before delivery
to the Registrar.
Increase and Consolidation of Share
Capital
5. The notice of consolidation of share capital, conversion
of shares into stock etc. must be given in Form SC11 (Section
54).
6 A company is required to give notice of an increase in
nominal share capital within 15 days after it takes effect
and to remove the requirement for a printed copy of the resolution
authorizing the increase to be filed with the Registrar (Section
55).
Reduction of Share Capital
7. Sections 58, 59 and 61 have been amended and a new section
61A has been added to streamline the procedures relating to
reduction of share capital and to remove the requirement for
court approval to a reduction of share capital if the sole
purpose of the reduction is to redesignate the nominal value
of the shares to a lower amount. Five specific conditions
must also be satisfied, namely: the company only has one class
of shares; all issued shares are fully paid up and the amount
of the net assets of the company is not less than its paid-up
share capital; the reduction applies to and affects all shares
equally; the amount arising from the reduction is not less
than an amount representing the difference between the amount
of the company's fully paid-up capital immediately before
and after the reduction and the amount arising from the reduction
is credited to the share premium account of the company.
Duties of a Company with Respect to
Issue of Certificates
8. Companies other than private companies must complete transfers
of shares and debentures and have certificates thereof ready
for delivery within 10 business days after the date on which
a transfer is lodged with the company (Section 70).
Register of Members
9. The occupations or descriptions of members of the company
are not longer required to be stated in the company's register
of members has been repealed. However, a company is required
to record that fact in the company's register of members if
the number of whose members falls to one or increases to two
or more (Section 95A).
Quorum Where the Company Has Only One
Member
10. One member constitutes a quorum for a meeting of a company
having only one member (Section 114AA).
Directors
11. A number of provisions relating to 'Directors' have been
amended as follows:-
(a) Section 2(1) has been amended to contain a general definition
of a 'Shadow Director' which includes someone who can influence
a majority of the directors. Consequential amendments resulting
from the definition have been made to sections 49BA(10)(b),
109(5), 158(10)(a), 168C(2), 271(3), 341, 344A(7) and 351(2).
(b) Section 153A(1) permits a private company to have only
one director.
(c) Section 153A(6) provides that, where a private company
has only one member and that member is the sole director of
the company, the company may in general meeting nominate a
natural person who has attained the age of 18 years as a reserve
director of the company to act in the place of the sole director
in the event of his death.
(d) Section 153B provides that an alternate director is the
agent of the director who appoints him and provides that a
director shall be vicariously liable for torts committed by
his alternate. Section 153C provides that a written record
of a decision of the sole director of a private company shall
be sufficient evidence of that decision.
(e) Section 157B(1) provides that a director may be removed
by an ordinary resolution instead of a special resolution
notwithstanding any provision in the company's constitution.
(f) A new section 157D(4) has been added to state the definition
of 'director' to include a reserve director and a person deemed
to be a director under section 153A(8). A new specified form
'Notification of Resignation of Reserve Director' (Form D8)
has been introduced for use by the resigning reserve director
to notify the Registrar of his resignation pursuant to section
157D.
(g) Section 158(4) has been amended to include the requirements
for a company to notify the Registrar of the nomination of
a reserve director in the specified form within 14 days from
such nomination and of any changes in the reserve director
in the specified form within 14 days from the occurrence of
the change. The new specified forms introduced for these purposes
are 'Notification of Reserve Director (Nomination/Cessation)'
(Form D5) and 'Notification of Change of Particulars of Reserve
Director' (Form D7).
(h) A new section 158(5A) has been added to require the person
who is nominated as a reserve director to sign and deliver
to the Registrar, within 14 days from the nomination, a statement
in the specified form (Form D6) that he has accepted his nomination
and has attained the age of 18 years.
Related Topics:
Features of Hong Kong company
Hong Kong company registration
procedures
Hong Kong company registration
and maintenance costs
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