Amalgamate of companies in a group
Protected Information (New)
Record keeping of minutes of directors' meeting
Record keeping of members' resolutions and meetings
Records of Register of Charges
Significant Controllers Register (SCR) - Interpretation of Legal Terms, effective as from 1st March 2018
Requirement to Appoint Company Secretary
Choice between de-registration and liquidation
Deregistration, Striking off and Winding up
Guideline on keeping a Significant Controllers Register by Companies
Part 13 – Companies Ordinance (court-free procedure under division 3)
Arrangements, Amalgamation, and Compulsory Share Acquisition in Takeover and Share Buy-back
(Amended E.R. 1 of 2013)
- Related matters in connection with amalgamation: Tax Treatments [read] || Accounting Treatments [read]
The subject entity will cease to exist after it has completed a winding up or an amalgamation. But, the two procedures differ in the following ways:
Memorandum of Association
Deeming provisions
Section 98 states that the provisions of the MoA of an existing company (i.e. a company formed and registered under Cap 32 or a former Ordinance), including objects clause (if any) and members’ liability, will be deemed to be regarded as provisions of the company’s Articles of Association (AoA).
To keep in line with the migration to no-par regime, section 98(4) also provides that the provisions contained in the MoA of an existing company stating the authorised share capital of the company or dividing the share capital of the company into shares of a fixed amount is regarded as deleted.
Effect of the deeming provisions
The abolition of MoA means that an existing company, which was set up under the predecessor Companies Ordinance, will have the AoA as the single constitutional document in the same way as a company established under the Companies Ordinance (Cap 622).
Alternation of Articles of Association
To make alternation to the AoA or MoA, as the case may be, the company is required to pass a special resolution and complete the procedures as laid down in sections 88, 89, and/or 90 respectively.
Alternation of clauses other than the object clauses
The Company has to pass a special resolution for that purpose, and file Form NAA1 to the Companies Registry for public information, together with a copy of the revised Articles of Association as certified by one of the directors.
Alternation of object clauses
The Company has to pass a special resolution, and file Form NAA2 to the Companies Registry for public information, together with a copy of the revised AOA, as certified by one of the directors.
Re-numbering and alternation of clauses in Memorandum of Association
This only applies to the type of companies that have been established before the commencement of the Companies Ordinance (Cap 622). The Company has to pass a special resolution, and file Form NAA3 to the Companies Registry for public information together with a copy of the revised AOA, as certified by one of the directors.
Mandatory provisions
Note that certain mandatory provisions must be retained in the amended AoA, such as the object clauses for the non-profit-making guarantee company. One cannot simply adopt the Model Article as provided under Companies (Model Articles) Notice (Cap 622H).
Further information is available from Division 2 in Part 3 of the Companies Ordinance (Cap 622).
Loans to the director (Chinese Version [read])
Introduction
After the coming into operation of the Companies Ordinance (Cap 622), whether a director could borrow money from the company, and if yes, how these loan transactions should be handled if the transactions continue to exist after the coming into effect of the Companies Ordinance?
Exception
Section 505 provides that, if loan amount does not exceed 5% of the Company's net asset as per last audited financial statement or if the audited financial statement is not available, the amount of the Company's called up capital, the loan amount does not require any approval by the members / shareholders.
Exemption
The above questions can be considered in two aspects. The first is about the legitimacy of the loan. In that respect, one can check whether these loans have been approved by the company's members in the general meeting (S500). The second is transparency of the loan transaction. In that respect, one can check whether the loan has been disclosed in company’s financial statements (S383). If the loan has been approved and disclosed, then the loan transaction is legitimate and lawfully reported. These requirements are not only applicable to the loans that are granted after the commencement of the Companies Ordinance, but also to loans that have not been repaid on 3rd March 2014, the commencement date of the Companies Ordinance.
Provision for contravening transactions
Section 383(6) provides that if the loan has not been disclosed in the financial statements, every director commits an offence, and shall be subject to a fine at level 5. As per Schedule 8 of the Criminal Procedures Ordinance, a fine at level 5 amounts to HK$50,000.
Section 513 provides that where the company has not approved the loan, the loan is voidable at the instance of the company unless restitution of the asset is no longer possible, the company has been indemnified for any loss or damage resulting from the transaction, or the person other than the director, for whom the transaction was entered into in good faith, for value and without notice of the contravention and those rights would be affected by the avoidance. Irrespective of whether the loan is avoided, the director to whom the loan is granted is under a civil obligation to repay the loan to the company. The civil obligation is also extended to any other director who authorized the loan.
Section 514 provides that in spite of the provisions under section 513, the loan transaction may no longer be avoided if it is affirmed within a reasonable period of time by the company. If the loan was entered into without the approval of the company’s members, the affirmation must be obtained by the resolution of the company’s members. If the loan was entered into without the approval of the members of the holding company, the affirmation must be obtained by the resolution of the holding company’s members.
Scope of the loan provision
The provision of section 500 shall apply to the loans to a director, the company under the control of a director, the guarantee given to or security provided in respect of the loan, or the guarantee given to or security provided for the company under the director’s control. Section 500 shall also apply to the loan to director of the holding company, the company under the control of the director of the holding company, the guarantee given to or security provided for the director of the holding company, or the guarantee given to or security provided for the company under the control of the holding company’s director.
Sections 500 shall apply to private companies, excluding specified companies. As per section 491, a specified company includes a public company, a private company, or a company limited by guarantee that is a subsidiary of a public company.
Excluded transaction
Section 505 provides that the restriction under section 500 does not apply where the aggregate of the value of the loan transaction and the value of other relevant transaction does not exceed 5% of the net assets as determined by the company’s financial statement, or if no such relevant financial statements have been prepared, the amount of the company’s called up capital.
a) Simplified Reporting
Sections 359 and 360 provide that certain types of companies including groups of companies, are eligible for the reporting exemption under which the financial statements need not give a true and fair view, and the conditions which a company (or a group of companies) must satisfy in order to be eligible for the reporting exemption.
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Cap 622 Part 9 |
Accounts and Audit |
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Cap 622 Part 9 Division 2 |
Reporting Exemption |
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Cap 622 s 359 |
Company falling within reporting exemption |
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Cap 622 s 360 |
Conditions specified for section 359(1)(c)(iii) and (2)(c)(ii) |
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Cap 622 s 361 |
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Cap 622 s 362 |
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Cap 622 s 363 |
Small guarantee company |
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Cap 622 s 364 |
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Cap 622 s 365 |
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Cap 622 s 366 |
Group of small guarantee companies |
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Cap 622 s 366A |
Mix group |
See the legal texts from S359 to 366A. [here]
b) Exemption from preparing consolidated financial statements
Section 379(1) provides that a company' s directors must prepare for each financial year statements that gives a true and fair view under sections 380 and 383.
Section 379(2) provides that despite section 379(1), if the company is a holding company at the end of the financial year, the directors must instead prepare for the financial year consolidated statements that gives a true and fair view under sections 380, 381 and 383.
Section 379(3) specificially provides that a holding company is not required to prepare consolidated financial statements under the following conditions:
(a) if the company is a wholly owned subsidiary of another body corporate in the financial year; or
(b) if—
(i) the company is a partially owned subsidiary of another body corporate in the financial year;
(ii) at least 6 months before the end of the financial year, the directors notify the members in writing of the directors' intention not to prepare consolidated statements for the financial year, and the notification does not relate to any other financial year; and
(iii) as at a date falling 3 months before the end of the financial year, no member has responded to the notification by giving the directors a written request for the preparation of consolidated statements for the financial year.
Minutes of directors' meeting
Section 481
(1) A company must cause minutes of all proceedings at meetings of its directors to be recorded.
(2) A company must keep the records under subsection (1) for at least 10 years from the date of the meeting.
(3) If a company contravenes subsection (1) or (2), the company, and every responsible person of the company, commit an offence, and each is liable to a fine at level 5 and, in the case of a continuing offence, to a further fine of $1000 for each day during which the offence continues.
Section 483
(1) If a private company has only one director and the director takes any decision that—
(a) may be taken in a meeting of directors; and
(b) has effect as if agreed in a meeting of directors,
the director must (unless that decision is taken by way of a resolution in writing) provide the company with a written record of that decision within 7 days after the decision is made.
(2) If the director provides the company with a written record of a decision in accordance with subsection (1), that record is sufficient evidence of the decision having been taken by the director.
(3) A company must keep a written record provided to the company in accordance with subsection (1) for at least 10 years from the date of the decision.
(4) A director who contravenes subsection (1) commits an offence.
(5) If a company contravenes subsection (3), the company, and every responsible person of the company, commit an offence.
(6) A person who commits an offence under subsection (4) is liable to a fine at level 3.
(7) A person who commits an offence under subsection (5) is liable to a fine at level 5 and, in the case of a continuing offence, to a further fine of $1000 for each day during which the offence continues.
Records of Resolutions and meetings
S617 (One member company)
(1) It provides that a member takes any decision that—
(a) may be taken by the company at a general meeting; and
(b) has effect as if agreed by the company at a general meeting.
(2) The member must, unless the decision is taken by way of a written resolution, provide the company with a written record of that decision within 7 days after the decision is made.
(3) A person who contravenes subsection (2) commits an offence and is liable to a fine at level 3.
S618 (Records of resolutions and meetings)
(1) A company must keep records comprising—
(a) copies of all resolutions of members passed otherwise than at general meetings;
(b) minutes of all proceedings of general meetings; and
(c) all written records provided to the company in accordance with section 116BC(1) of the predecessor Ordinance or section 617(2).
(2) A company must keep the copy, minutes or written record under subsection (1) for at least 10 years from the date of the resolution, meeting or decision, as the case may be.
(3) If a company contravenes subsection (1) or (2), the company, and every responsible person of the company, commit an offence, and each is liable to a fine at level 5 and, in the case of a continuing offence, to a further fine of $1000 for each day during which the offence continues.
S619 (Place where records must be kept)
(1) A company must keep the records mentioned in section 618 at—
(a) the company’s registered office; or
(b) a prescribed place.
(2) A company must notify the Registrar of the place at which the records mentioned in section 618 are kept. The notice must be in the specified form and delivered to the Registrar for registration within 15 days after the records are first kept at that place.
(3) A company must notify the Registrar of any change (other than a change of the address of the company’s registered office) in the place at which the records mentioned in section 618 are kept. The notice must be in the specified form and delivered to the Registrar for registration within 15 days after the change.
Non-compliance
If a company contravenes subsection (1), (2) or (3), the company, and every responsible person of the company, commit an offence, and each is liable to a fine at level 5 and, in the case of a continuing offence, to a further fine of $1000 for each day during which the offence continues.
Note : A fine at level 4 is HK$25,000; a fine at level 5 is HK$50,000.
Other company records
Records of register of charges
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Hong Kong Company |
Registered non-HK Company |
Notification of place where internal records are kept |
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Externally filed records |
S338 |
S339 |
Not applicable |
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Internally kept records |
S352 |
S353 |
S354 |
Obligation to keep copy of Instrument creating charges internally
Section 351(1) and (2)
Copies of instrument creating charges under Part IV, Companies Ordinance (Cap 622); or under Part III, the Predecessor Ordinance (Cap 32) must be kept at following specified locations:
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S351(1) - A HK Company |
Registered office, or |
at a place prescribed by regulations (Cap S662I) |
The financial secretary is empowered to makes under S657 |
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S351(2) - A registered non-HK company |
Principal place of business, or |
at a place prescribed by regulations (Cap S662I) |
Under S356 |
Section 351(4)
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Both types of companies should notify the Companies Registrar
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After copy of instrument is first kept |
Within 15 days |
In specified form |
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After change in the place such instrument is kept |
Within 15 days |
In specified form |
Contravention of S351(1), (2) or (4)
Company, registered non-HK company, and every responsible person commit an offence, and is liable to a fine at level 4. In the case of continuing contravention, a further fine at HK$700 for each day during which the contravention continues.
Obligation to keep Register of Charges internally
Section 352 and section 353
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Location |
Scope |
Contravention |
Wilful contravention |
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Hong Kong Company: Registered office (S352) |
Charge affecting Company’s property, and floating charges on Company’s property or undertaking |
Company, and every responsible person liable to a fine at level 4 (HK$25,000), in case of continuing offence, further fine of $700 for each day during the continuing offence |
Company’s officer commits an offence and is liable to fine at level 5 (HK$50,000). |
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Registered non-HK company: Principal place of business in HK of a registered non-HK company (S353) |
Every charge created by company on Company’s HK property, charge on property in HK acquired by Company |
Ditto |
Officer of the registered non-HK company commits an offence and is liable to fine at level 5 (HK50,000). |
Notification of place where register of charge is kept
Sections 354(1), and 354(2)
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Both types of companies: notify the Companies Registrar
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After copy of instrument is first kept |
Within 15 days |
In specified form |
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After change in the place such instrument is kept |
Within 15 days |
In specified form |
Contravention of S354(1) and S354(2)
The company, registered non-HK company, and every responsible person commit an offence, and each is liable to a fine at level 4. In the case of continuing contravention, a further fine at HK$700 for each day during which the contravention continues.
Significant Controllers Register (the SCR)
Who have the legal responsibility for keeping the SCR?
Section 652H imposes the SCR requirement on all the applicable companies.
The following applicable companies (as per interpretation under section 653A) are required to keep the significant controllers register (SCR), either in English or in Chinese:
Note: S653H provides that if an applicable company is not compliant with the above requirement, the company, and every responsible person of the company, commit an offence, and each is liable to a fine at level 4 (HK$25,000) and, in the case of a continuing offence, to a further fine of $700 for each day during which the offence continues.
Where the significant controllers register is to be kept?
Section 653M provides that an applicable company, as defined above, must keep a significant controllers register at the company's registered office or a prescribed place in Hong Kong.
The company must notify the Registrar of the place at which its significant controllers register is kept. The notice must be in the specified form; and must be delivered to the Registrar for registration within 15 days after the register is first kept at that place.
However, an applicable company is not required to comply with the notification requirement if, since its significant controllers register came into existence, the register has at all times been kept at the company's registered office.
An existing company is not required to comply with the notification requirement if—
(a) since the commencement date, the company's register of members has at all times been kept at the place at which it was kept immediately before that date;
(b) since the company's significant controllers register came into existence, the register has also at all times been kept at that place; and
Note : If the notification requirement is contravened, the company, and every responsible person of the company, commit an offence, and each is liable to a fine at level 4 (HK$25,000) and, in the case of a continuing offence, to a further fine of $700 for each day during which the offence continues.
Change in place at which the SC register is kept
S653N provides what the company must do in relation to a change in place at which register is kept.
(1) An applicable company must notify the Registrar in accordance with subsection (2) of a change in the place at which its significant controllers register is kept
(2) The notice must be in the specified form; and must be delivered to the Registrar for registration within 15 days after the change.
(3) An applicable company is not required to comply with subsection (1) in relation to a change mentioned in that subsection if—
(a) its significant controllers register is kept at the company's registered office; and
(b) the change is due to a change of the registered office's address.
Note : If subsection (1) is contravened, the company, and every responsible person of the company, commit an offence, and each is liable to a fine at level 4 and, in the case of a continuing offence, to a further fine of $700 for each day during which the offence continues.
What the applicable company is required to do?
An applicable company must also
Significant Controller Register cannot be empty
Section 653H provides that a company must keep a SC register even if it does not have a registrable person or a registrable legal entity. If the company knows that it has no registrable person or registrable legal entity, it must state this fact in the SC register with the following wording: "The company knows, or has reasonable cause to believe, that it has no significant controller.”
Contents of register
Section 653I(1) and (2) provide for the contents of the register.
(1) The significant controllers register of an applicable company must contain the following particulars of each person that the company knows to be a significant controller of the company—
(a) the particulars prescribed in Schedule 5B that are applicable to the person; and
(b) for a registrable change with respect to the person—
(i) details of the change; and
(ii) the date on which the change occurs.
(2) The register must also contain—
(a) the name and contact details of at least one person designated by the company under section 653ZC; and
(b) all the additional matters required to be noted in the register under Schedule 5C in relation to the company.
Note: If subsection (1)(a) or (b) or (2)(a) or (b) is contravened, the company, and every responsible person of the company, commit an offence, and each is liable to a fine at level 4 (HK$25,000) and, in the case of a continuing offence, to a further fine of $700 for each day during which the offence continues.
Investigation and obtaining information by an applicable company
S653P provides for the Company's duty to investigate and obtain information
(1) An applicable company must take reasonable steps—
(a) to ascertain whether there is any significant controller of the company; and
(b) if any, to identify each of them.
(2) Without limiting subsection (1), if the company knows, or has reasonable cause to believe, that a person is a significant controller of the company, the company must give a notice, in accordance with section 653Q, to the person within 7 days after the first of the following to happen—
(a) the company first knows that the person is a significant controller of the company;
(b) the company first has reasonable cause to believe that the person is such a controller.
(3) Without limiting subsection (1), if the company knows, or has reasonable cause to believe, that a particular person knows the identity of another person who is a significant controller of the company, the company must give a notice, in accordance with section 653R, to the particular person within 7 days after the first of the following to happen—
(a) the company first knows that the particular person knows the identity of another person who is a significant controller of the company;
(b) the company first has reasonable cause to believe that the particular person knows the identity of another person who is such a controller.
Note: If subsection (1), (2) or (3) is contravened, the company, and every responsible person of the company, commit an offence, and each is liable to a fine at level 4.
Duty to keep information up-to-date
S653T provides that Company has a duty to keep information up-to-date.
(1) This section applies to an applicable company if the company knows, or has reasonable cause to believe, that there is a registrable change with respect to a person, the details of which are required to be contained in the significant controllers register of the company.
(2) The company must give a notice, in accordance with section 653U, to the person to whom the registrable change relates within 7 days after the first of the following to happen—
(a) the registrable change first comes to the notice of the company;
(b) the company first has reasonable cause to believe that the change has occurred.
Note If subsection (2) is contravened, the company, and every responsible person of the company, commit an offence, and each is liable to a fine at level 4.
Right to inspect and request copy of register
S653W provides the right to inspect and request copy of register.
(1) A person whose name is entered in the significant controllers register of an applicable company as a significant controller of the company is entitled, on request made in the prescribed manner and without charge, to inspect the register in accordance with regulations made under section 657.
(2) A person mentioned in subsection (1) is entitled, on request and on payment of a prescribed fee, to be provided with a copy of the register, or a part of it, in accordance with regulations made under section 657.
S653X also provides that register shall be available for inspection by law enforcement officer.
(1) An applicable company must, on demand made by an officer of the Companies Registry for the purpose of ascertaining whether this Division is or has been complied with, or on demand made by any other law enforcement officer for the purpose of the officer's performance under the law of Hong Kong of a specified function, act as follows—
(a) at any reasonable time make its significant controllers register available for inspection by the officer at the place at which the register is kept; and
(b) permit the officer to make a copy of the register, or a part of it, in the course of inspection.
Note: If subsection (1)(a) or (b) is contravened, the company, and every responsible person of the company, commit an offence, and each offender is liable to a fine at level 4 (HK$25,000).
Addressee's legal responsibility
S653ZA provides that the addressee of notice shall comply with requirements made under section 653Q, 653R or 653U.
(1) If a requirement made under section 653Q, 653R or 653U is not complied with within 1 month from the date of the notice concerned, the addressee of the notice, and (if the addressee is a legal entity) every related person of the entity, commit an offence, and each is liable to a fine at level 4.
(2) If a person is charged with an offence under subsection (1), it is a defence for the person to prove that the requirement was frivolous or vexatious.
Offence for giving false information
S653ZE provides for an offence for providing false information
(1) A person commits an offence if the person, in purported compliance with a notice given under this Division, knowingly or recklessly makes a statement or provides any information that is misleading, false or deceptive in a material particular.
(2) A person who commits an offence under subsection (1) is liable— (a) on conviction on indictment to a fine of $300,000 and to imprisonment for 2 years; or (b) on summary conviction to a fine at level 6 and to imprisonment for 6 months.
How long can the entries in the company's SC register be destroyed?
S653L provides when may entries in register be destroyed.
If a person ceases to be a significant controller of an applicable company, all the entries in the company's significant controllers register relating to the person may be destroyed—
(a) for a natural person or specified entity—after the end of a period of 6 years from the date on which the person or entity ceased to be the company's registrable person; and
(b) for a legal entity—after the end of a period of 6 years from the date on which the entity ceased to be the company's registrable legal entity.
Interpretation of Legal Terms Relating to the Significant Controllers Register
Under S653A of the Companies Ordinance
A significant controller includes a registrable person and a registrable legal entity.
A registrable person is a natural person or a specified entity that has significant control over the company.
A registrable legal entity is a legal entity which is a member of the company and has significant control over the company.
A specified entity includes the following:-
Significant control--
Schedule 5A of the Companies Ordinance provides that a person has significant control over an applicable company as defined by section 653A if one or more of the following conditions are met—
Designated representative (S653ZC)
An applicable company must designate at least one person as its representative to provide assistance relating to the company's SC register to a law enforcement officer. The designated representative must be one of the following:
Law enforcement officers (S653B)
(1) Each of the following is a law enforcement officer for the purposes of this Division-
(a) an officer of the Companies Registry;
(b) an officer of the Customs and Excise Department;
(c) an officer of the Hong Kong Monetary Authority;
(d) an officer of the Hong Kong Police Force;
(e) an officer of the Immigration Department;
(f) an officer of the Inland Revenue Department;
(g) an officer of the Insurance Authority established under section 4AAA(1) of the Insurance Ordinance (Cap. 41);
(h) an officer of the Independent Commission Against Corruption Ordinance (Cap. 204);
(i) an officer of the Securities and Futures Commission referred to in section 3(1) of the Securities and Futures Ordinance (Cap. 571);
(j) an officer of any department or agency of the Government, or of any statutory body, that is specified by the Financial Secretary by regulations made under section 653ZG(1)(b) for the purposes of this paragraph.
(2) In section (1), statutory body means a body established or constituted by, or under the authortiy of an Ordinance.
Registrable change (S653F)
There is a registrable change with respect to a person if -
(a) the person ceases to be a significent controller of an applicable company; or
(b) any other change results in any particulars entered in the Company's significant controllers register for the person being incorrect or incomplete.
Responsible person (S3)
(1) This section applies—
(a) where a provision of this Ordinance provides that a responsible person of a company or non-Hong Kong company commits an offence if there is—
(i) a contravention of this Ordinance, or of a requirement, direction, condition or order; or
(ii) a failure to comply with a requirement, direction, condition or order; or
(b) where this Ordinance empowers a person to make subsidiary legislation that will contain such a provision.
(2) For the purposes of the provision, a person is a responsible person of a company or non-Hong Kong company if the person—
(a) is an officer or shadow director of the company or non-Hong Kong company; and
(b) authorizes or permits, or participates in, the contravention or failure.
(3) For the purposes of the provision, a person is also a responsible person of a company or non-Hong Kong company if—
(a) the person is an officer or shadow director of a body corporate that is an officer or shadow director of the company or non-Hong Kong company;
(b) the body corporate authorizes or permits, or participates in, the contravention or failure; and
(c) the person authorizes or permits, or participates in, the contravention or failure.
Section 2 of the Companies Ordinance provides that Officer (高級人員), in relation to a body corporate, includes a director, manager or company secretary of the body corporate;
Specified particulars (S635O)
(1) In this Division, specified particulars, in relation to a person,
(a) means the particulars of a person falling within a description of the particulars prescribed in scheducle 5B, but
(b) if the person is a natural person, does not include
(i) the number of an identity card of a person, and
(b) the number and issuing country of the passport held by the person.
(2) In sections 653P, 653Q and 653R, a reference to knowing the identity of a person includes knowing any information from which the person can be identified.
References
Guideline published by the Companies Registry
2018 Companies (Amendment) Ordinance
Requirement for a Hong Kong Company to appoint a Company Secretary
Section 474 - Company required to have company secretary
(1) A company must have a company secretary.
(2) With effect from the date of incorporation of a company, the first company secretary of the company is the person named as the company secretary in the incorporation form delivered to the Registrar under section 67(1).
(3) If the name of a firm is specified in the incorporation form under section 5(1)(c) of Schedule 2, all partners of the firm as at the date of the incorporation form are the first joint company secretaries of the company.
(4) A company secretary of a company must—
(a) if a natural person, ordinarily reside in Hong Kong; and
(b) if a body corporate, have its registered office or a place of business in Hong Kong.
Section 475 - Circumstances under which director may not be company secretary
(1) Subject to subsections (2) and (3), a director of a company may be a company secretary of the company.
(2) The director of a private company having only one director must not also be a company secretary of the company.
(3) No private company having only one director may have as company secretary of the company a body corporate the sole director of which is the sole director of the private company.
Section 476 - Direction requiring company to appoint company secretary
(1) If it appears to the Registrar that a company is in contravention of section 474(1) or (4) or 475(2) or (3), the Registrar may direct the company to appoint a company secretary in compliance with that section.
(2) The direction must specify—
(a) the statutory requirement of which the company appears to be in contravention;
(b) subject to subsection (3), the period within which the company must comply with the direction; and
(c) that a failure to comply with the direction is an offence under subsection (6).
(3) The period must not be less than one month or more than 3 months after the date on which the direction is given.
(4) The Registrar may, before the end of the period specified in the direction, by notice in writing extend the period.
(5) The company must comply with the direction by making the necessary appointment before the end of the period specified in the direction, or, if the period is extended by the Registrar under subsection (4), the extended period.
(6) If a company fails to comply with a direction under this section, the company, and every responsible person of the company, commit an offence, and each is liable to a fine at level 6 and, in the case of a continuing offence, to a further fine of $2,000 for each day during which the offence continues.
Transactions relating to share captial
Transactions relating to share capital include the following:
Comparison between predecessor and new Companies Ordinances
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Reduction of Capital |
Share Buy-back |
Financial Assistance |
Financial Assistance for Purpose of Employee Scheme |
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Cap 32 – the predecessor Companies Ordinance |
Section 58 to 63 |
Sections 49 to 49H (general provision) Sections 49I to 49O (redemption out of capital for a private company) |
Sections 47A to 47C (general provision / application) Sections 49A to 49B Sections 49I to 49N |
Section 47C(4)(b) |
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Cap 622 – the Companies Ordinance, effective as from 2014.3.3. |
Sections 209 to 228 |
Sections 233 to 270 Sections 215 to 266 (purchase of share out of capital of a private company) |
Section 274, Sections 275 to 281 (general application) Sections 277 to 289 |
Section 280 allows financial assistance for all types of employee share schemes if financial assistance is given in good faith in the interest of the Company. |
Choice between de-registration and liquidation
Please refer to the analysis under the heading HK Companies Ordinance [Read]
Deregistration, Striking Off and Winding Up
Dissolution
A Hong Kong company can be dissolved in the following ways: de-registration under s750, winding up (liquidation), and striking off under s746 or s747.
Restoration
Except for winding up, a company that has been dissolved can be restored to its original position as if the company had not been dissolved.
In the case of a company that has been dissolved by de-registration under section 751, the director(s) or member(s) can apply to the court for an order for restoration under section 765.
In the case of a company that has been dissolved by striking off under section 746, the director(s) or member(s) may apply for an administrative restoration by the Companies Registrar under section 760.
In the case of a company that has been dissolved by liquidation, no restoration is available.
Reference: For a comparison between striking off, de-registraiton and winding up, see FAQ at the link to Companies Registry. [read]
A summary of the Companies Ordinance is given below:
| Striking off | Deregistration | Liquidation | |
| Sections | Apply under s746 | Apply under s750 | N/A |
| Restoration? | Yes, under s760 | Yes, under s765 | N/A |
| Type of restoration | Administrative | Judicial | N/A |
| Who restores? | Companies Registrar | Court Order | N/A |
Restoration is a remedy for striking-off and de-registration because prior notice to the creditors have not been given by either public notice in newspapers or government gazette.
A summary of the types of liquidation is given below for references:
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Voluntary liquidation |
Compulsory liquidation |
|
|
Initiator |
Member(s) |
Creditors |
Any aggrieved persons |
|
Financial position |
Solvent |
Insolvent |
Either solvent or insolvent |
|
Liquidator |
Any person over age of 18 |
Professional accountant or solicitor |
Professional accountant or solicitor |
|
Public notice |
Gazettes |
Gazette & newspapers |
Gazette & newspapers |
Guidelines for Directors (4th edition)
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