Hong Kong's Draft Companies Bill To Be Issued In 2009

by Mary Swire, Tax-News.com, Hong Kong

15 December 2008

Sixty-one submissions have been received in the second public consultation on Hong Kong's Companies Ordinance rewrite, the territory's Financial Services and the Treasury Bureau has revealed.

The bureau announced on Wednesday that the final recommendations will be incorporated into the Companies Bill, to be issued in the form of a draft bill for further public consultation in mid-2009.

The bureau plans to introduce the bill into the Legislative Council by the third quarter of 2010.

In the second public consultation conclusions released on December 11, the bureau said the following key recommendations will be adopted:

• the Registrar of Companies should be empowered to act upon a court order directing a defendant company to change its infringing name, and substitute its infringing name with its registration number if the company fails to comply with the registrar's direction to do so;
• hybrid names will continue to be disallowed;
• directors' duty of care, skill and diligence should be codified, to clarify the law in this respect. Directors' fiduciary duties should remain uncodified;
• corporate directorship will continue to be allowed in private companies. However, every company must have at least one director who is an individual, subject to a grace period; and,
• some technical amendments, including requiring the instrument of charge to be registered together with some simple particulars, will be made to the relevant provisions.

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