After a long rewriting exercise, the new Companies Ordinance of
Hong Kong was gazetted on 10 August 2012. In our previous update,
New Companies Ordinance Expected to Take Effect in 2014, we
highlighted some of the major purposes and initiatives of the new
Companies Ordinance (CO) which are expected to
take effect in 2014.
In this legal update we focus on the new provisions in the CO
that could impact the financing related transactions of our
clients. The key points to note are:
Improvements to Registration of Charges:
What new items must now be registered?
A charge on an aircraft or any share in an aircraft
A charge on the due but unpaid instalment of the issue price of
What no longer needs to be registered?
A shipowner's lien on the subfreights for amounts due under
A charge which secures an issue of debentures
A charge over a deposit or bank account
Documentation and timing requirements:
A certified copy of the charge (and the associated release)
must be registered with the Registrar of Companies together with a
statement of particulars
The registration period has been shortened to one month
Consequences of failing to register:
Lenders now have an option to accelerate the secured amount (it
is no longer automatic)
Relaxation of Financial Assistance
In addition to exceptions carried across from the old Companies
Ordinance, all types of companies (whether listed or unlisted) can
provide financial assistance to another party to acquire the
company's own shares or the shares of its holding company
satisfying a solvency test; and
obtaining requisite board and/or shareholder approvals (see
"Allowing provision of financial assistance to acquire
shares" in New Companies Ordinance Expected to Take Effect in
2014 for specific approval details)
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This article provides information and comments on legal
issues and developments of interest. The foregoing is not a
comprehensive treatment of the subject matter covered and is not
intended to provide legal advice. Readers should seek specific
legal advice before taking any action with respect to the matters
discussed herein. Please also read the JSM legal publications
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Confidentiality of corporate documents and information is one of
the key attractions of incorporating a company in the BVI. A
company search of the BVI Registrar of Corporate Affairs will only
disclose certain information and documents.
When pursuing a debt, it is common to add a claim for interest on the monies due.
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