The new Companies Ordinance was passed by the Hong Kong Legislative Council in July 2012. With the exception of sections on corporate insolvency and public offerings, which are currently undergoing separate rewrites, the entire legislative framework for companies incorporated or registered in Hong Kong (whether or not also listed in Hong Kong) has been revamped.
Among the key initiatives embodied in the new Ordinance are:
- abolition of par value for shares;
- restricting corporate directorships in private companies (at least one natural person director is required);
- replacing the “headcount” test by a “not more than 10% voting against” test for members’ schemes of arrangement;
- partial codification of directors’ fiduciary duties;
- strengthening enforcement against offences;
- facilitating simplified financial reporting; and
- strengthening auditors’ rights.