The Companies (Amendment) (No. 2) Ordinance 2018

Hong Kong

The Companies (Amendment) (No. 2) Ordinance 2018 (the Amendment Ordinance) has been introduced to streamline the administration of Hong Kong companies and facilitate compliance and came into force on 1 February 2019[1].

Background 

The new Companies Ordinance (Cap. 622) (CO), which commenced operation in March 2014, provides for a modern statutory framework for the incorporation and operation of companies in Hong Kong. The Amendment Ordinance introduces revisions to the CO and its subsidiary legislations to incorporate new developments, clarify existing CO provisions and further facilitate business activities in Hong Kong.

Key revisions

The major revisions under the Amendment Ordinance include: updating accounting-related provisions, rationalising corporate reporting obligations, and modifying certain procedural and technical requirements regulating local companies and non-Hong Kong companies.

The amendments mostly relate to audited reports or are very minor and / or form part of Marbury’s existing operating procedures in the provision of company secretarial services to Hong Kong companies. However would like to highlight the following:

Display of company names for non-Hong Kong companies

• Empowering the Financial Secretary to make regulations for non-Hong Kong companies to provide for the detailed requirements relating to the display of company names and the disclosure of liability status in order to align the obligations of non-Hong Kong companies with those of local companies.

Streamlining and clarifying provisions to facilitate compliance:

• Expressly allowing a company’s articles to be in electronic form.
• Clarifying that if a company has both an English registered name and a Chinese registered name –
  • both names must be stated in its articles
  • the common seal of the company may be engraved with only its English name or Chinese name, and
  • the company may display either its English name or Chinese name.
• Providing for an exemption from the general registration requirement for an alteration of articles if such alteration is in respect of a change of company name only, as separate registration requirement already applies to a change of company name.
• Clarifying that the statement of capital should report the share capital position immediately after the relevant change instead of the capital position as at the date.
• Providing that all members in a class agree to a variation of the class rights, the variation will take effect on the date of, or other such date as specified in, the written consent or unanimous resolution of all such shareholders in a general meeting. No holder or member may apply to the court to have the variation disallowed in such circumstances.

A summary of the key amendments can be found here in the original circular provided by Companies Register.

If you have any further queries or would like to enquire about Marbury’s Company Secretarial services, please contact your usual Marbury representative or info@marburys.com.

 

[1] Apart from amendments to sections 792 and schedule 7 of the CO which relate to the disclosure requirements of non-Hong Kong companies and the related offence and which will commence later.