10 January 2014

Hong Kong: The new Hong Kong Companies Ordinance

Hong Kong’s new Companies Ordinance (Ordinance) will come into effect on 3 March 2014. The new Ordinance introduces a number of changes that impact, among other things, company meetings, resolutions, the execution of documents and communications with shareholders.

Key changes that will be introduced include:

  • time periods for holding AGM’s will be required to be set by reference to the company’s accounting reference date,
  • a company will be able to dispense with AGMs with unanimous consent;
  • the threshold for demanding a poll will be reduced from 10% to 5% of members having the right to vote,
  • general meetings will be able to be held at multiple locations,
  • there will be clearer rights and obligations regarding proxies (including that all members will be allowed to appoint a proxy),
  • a new statutory procedure for proposing, passing and recording written resolutions will be established;
  • directors’ conduct that amounts to negligence, default, breach of duty or breach of trust will have to be approved by disinterested shareholders,
  • the requirement for a mandatory company seal will be abolished;
  • the indoor management rule will be codified, and
  • new provisions governing communication to and from companies in electronic and hard copy form will be introduced (including provisions that set out deemed receipt).

In preparation, Hong Kong companies should:

  • plan ahead for the next AGM to ensure that it is held in accordance with the Ordinance requirements;
  • review their Articles of Association to assess whether any changes are desirable to take account of the new provisions in the Ordinance, and
  • consider whether to continue to use the company seal and review internal controls and policies on execution of documents.

Please click here for the full report.

For further information, please contact Austin Sweeney, Partner, or your usual Herbert Smith Freehills contact.

No comments:

Post a Comment