It has been one year since the new Companies Ordinance
Cap 622 came into effect in Hong Kong. Our local Director of
Corporate Secretarial examines its impact in facilitating
businesses in the city.
Implemented on 3 March 2014, the new Companies Ordinance (CO) -
consisting of 921 sections and 11 schedules - aims to modernise
legal framework governing the incorporation and operation of
companies in Hong Kong. Besides that, it is also intended to
eliminate bureaucracy that hinders the ease of doing business and
reinforce HK's role as an international financial and
The new CO contains a host of new initiatives to facilitate
business and cater for the needs of the small and medium
enterprises (SMEs). It has simplified the procedures for starting a
business by removing the memorandum of association, and the
mandatory keeping and use of common seal. More SMEs can now prepare
simplified financial statements and directors' reports provided
that they can satisfy the prescribed qualifications.
Certain companies may dispense with the holding of annual
general meetings while general meeting could be held at more than
one location through electronic technology. Court-free options were
provided to companies that wish to engage in capital reduction
exercises or amalgamation of wholly owned intra-group companies in
One year after the new CO has been implemented; Hong Kong
recorded the second highest number of incorporation in five years.
Up to 167,280 of local companies have registered with the Companies
Registry in 2014. The figure is slightly lower than those achieved
in 2013 (174,031) and the reason behind is likely due to the waiver
of HK$2,000 for those business registrations during the period from
1 April 2013 to 31 March 2014.
The Companies Registry indicated to us that the Occupy Central
Movement appeared not having affected the number of local
incorporations. The figures in September, October and November 2014
(during the Movement) remained rather steady when compared to other
months in 2014 (except March 2014 where there was an influx of new
company incorporation applications). In 2014, US$111bn worth of FDI
flowed into the city (46% more than 2013). This made Hong Kong the
second most invested economy in the world (only behind China) by
over taking the USA and Singapore.
The Registrar of Companies shared in one of her articles that
the following statistics from 3 March to end December 2014 may
testify the achievement of the initiatives to facilitate
127 applications for restoration of companies to the Companies
Register used the administrative restoration procedure, which
represented about 44.4% of the total number of applications for
92 out of 102 companies which reduced their capital used the
alternative court free procedure. This also represented a six-fold
increase in the total number of companies which have reduced their
capital, from 14 in 2013.
10 groups of companies have undergone amalgamation through the
new court free procedure.
Given new powers granted to the Registrar of Companies under the
new CO, the Companies Registry has set up a new Inspection Unit in
its Enforcement Section to conduct random checks and site visits of
registered office addresses of companies. More resources will also
be devoted to step up enforcement efforts for non-filing
Heralding the first anniversary of the new CO, the Companies
Registry launched a full scale electronic filing service effective
3 March 2015 to cover 84 specified forms for filing with the
Registry. The submission of specific forms can be done through the
e-Registry portal instead of the traditional paper submission
route. This facilitates easier reporting while delivering
efficiency for companies and disclosure of information to the
The Companies Registry has conducted a comprehensive
multi-channels publicity programme to promote public awareness of
the major changes in the new CO. Resources were also allocated to
attend questions raised by the public. The Registry will continue
to monitor any issues arising from the implementation of the new CO
and enhance the services delivered at their e-platforms.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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