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.

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