What are the latest Hong Kong regulations?

Pursuant to the new Companies Ordinance (Cap. 622) (the “New CO”) of Hong Kong, which came into effect on 3 March 2014, the requirement for a company to have a Memorandum of Association (“MA”) has been abolished and the Articles of Association (or Articles) becomes the single constitutional document containing the regulations governing the operations of a company. The New CO provides deeming provisions under which the existing clauses (except for the authorized capital clause which is deemed deleted) in the MA are regarded as provisions in the Articles.

What are the disadvantages if a company does NOT amend its Articles?

Despite the above-mentioned deeming provisions under the New CO, there would be practical issues and confusion if a company does NOT amend its Articles:

• The company’s constitutional document will appear to contain both MA and Article.
• All abolished provisions (e.g. authorized capital clause, provisions with par value, etc.) and references to sections in the predecessor Companies Ordinance (Cap. 32) will continue to appear in the Articles.
• The Company may not be able to take advantage of new initiatives under the New CO (e.g. capital related transactions, capitalization of profits under the new no par regime, notice period required for passing a special resolution, etc.).

What do I need to do?

We highly recommend the company to adopt a new set of Articles, tidying up the company’s Articles generally and bringing existing provisions in the Articles in line with the New CO.

Tricor, At your Service

Your path to compliance is simple with Tricor, the leading business expansion specialist in Asia. Ensure the smooth operation of your Hong Kong entity now by contacting one of our team members or filling in the enquiry form.