With the aim to further enhancing Hong Kong position as a major international business and financial centre, the Hong Kong Legislative Council has passed the new Companies Ordinance (the “Ordinance”) which is expected to come into effect in the first quarter of 2014.
The Companies Law requires every Cayman company to maintain a register of directors and officers and a copy must be filed with the Cayman Registrar of Companies (“ROC”). In January 2013, the relevant provisions were amended to bring alternate directors within the scope of the registration requirements. A further amendment, which took effect on 6 May 2013, clarified the types of alternate directors to which the registration requirements apply.
The Ordinance consists of more than 900 sections, 11 schedules and 12 items of subsidiary legislation. The Ordinance aims to achieve the following main objectives:
- Modernising the law
- Enhancing corporate governance
- Ensuring better regulations
- Facilitating business operations
Key changes include:
- Abolition of memorandum of association of company
- Adoption of a mandatory system of no-par value of shares for all companies with a share capital
- Removal of the power of companies to issue share warrants to bearers
- Requirement of having at least one (1) natural person as director for all private companies
- Introduction of new alternative court-free procedures for reducing capital based on a solvency test
- Allowing all companies to buy back shares out of capital and to provide financial assistance for acquisition of own shares, subject to a solvency test
- Allowing eligible small private companies to prepare simplified financial and directors’ reports
- Relaxation of the requirement for a company having an official seal for use abroad
- Dispensing with annual general meeting by unanimous shareholders’ consent
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