Hong Kong Opens Third Companies Law Consultation
The Hong Kong Financial Services and the Treasury Bureau has launched the third
public consultation on the Companies Ordinance rewrite, covering share capital,
the capital maintenance regime and statutory amalgamation procedure. It will last
three months until 30th September.
On share capital the bureau proposes to introduce a mandatory no-par value
share regime for all companies and provide a 12-month period for companies to
review their arrangements before migration to no-par. It also proposes to make other consequential and related amendments following
the migration to no-par. On the capital maintenance regime, it does not recommend adopting an across-the-board
solvency test approach to distributions of all forms. Views are invited on whether to streamline or modify the existing capital maintenance
rules concerning reduction of capital, purchase by a company of its own shares
and financial assistance by a company to another party for acquiring its own
shares. The bureau is also considering a court-free statutory amalgamation procedure. The Companies Ordinance rewrite exercise began in mid-2006 to modernise company
law. The second consultation covering company names, directors' duties, corporate
directorship and registration of charges will close 30th June. Views collected will be considered for a draft bill to be issued for public
consultation in mid-2009. The new Companies Bill is tentatively due for tabling
at the Legislative Council in 2010's third quarter. .
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