On 6 April 2018, the HKSAR Government published the Companies (Amendment) Bill 2018 (“Bill”) in the Gazette. The Bill amends a number of provisions in the new Companies Ordinance (Cap. 622) (“Ordinance”) and its subsidiary legislation. Among other amendments, the Bill expands the types of companies within the reporting exemption for private or guarantee companies (to prepare simplified accounts and directors’ reports), updates accounting-related provisions to reflect the latest accounting standards, and streamlines certain provisions to facilitate compliance with corporate filing requirements.
Some of the Bill’s more noteworthy amendments to the Ordinance include the following:-
- Where the holders or members of a class of shares all agree to a variation of class rights by written resolution or consent, the variation may take effect on the date specified in such resolution or consent. No holder or member may apply to the court to have the variation disallowed (amending sections 180, 182, 188 and 190 of the Ordinance);
- The exemption from the general prohibition on giving financial assistance for acquiring shares in a company, or reducing or discharging liability for acquiring shares, under section 275(3) Companies Ordinance has been repealed (as unnecessary). The exemption applied to the giving of financial assistance for the purpose of acquiring shares in a holding company, or for reducing or discharging any liability incurred for such an acquisition, if the subject shares concern a non-Hong Kong holding company (i.e. a company incorporated outside Hong Kong);
- The requirement to notify the Registrar of Companies under section 351 of the Ordinance will be exempted if the change only related to a change of the company’s registered office address or (in the case of a registered non-Hong Kong company) principal place of business;
- All resolutions passed by a company’s directors without a meetings must be recorded in writing [amending section 481 of the Ordinance];
- Various amendments to expand the types of companies benefitting from the reporting exemption are introduced to include the holding company of a group of companies whose members are not incorporated in Hong Kong, as well as the holding company of a “mixed group”;
- Where there is a horizontal amalgamation, the holding company need not be incorporated in Hong Kong (amending sections 678 and 681 of the Ordinance);
- Various amendments are introduced to clarify that if a company has both English and Chinese names, the company may choose to display only its English name or Chinese name;
- In relation to the Model Articles, an ordinary resolution is required only for certain types of alteration of the company’s share capital; and
- The authorised representative of a registered non-Hong Kong company must have an address in Hong Kong; and
The Bill is scheduled to be introduced into the Legislative Council for its first reading on 25 April, 2018.