Convention has been that Hong Kong company laws do not support the holding of fully virtual shareholders meetings. It is because the Hong Kong Companies Ordinance stipulates that shareholder meetings must be held in a physical location with members present in that location.
With fully virtual or hybrid meetings becoming the norm for companies during the COVID pandemic, the Hong Kong government has finally initiated to modernise the law and gazetted an amendment bill, to clarify that
- a general meeting can be physical, fully virtual or hybrid;
- fully virtual or hybrid meetings are possible so long as the Articles of Association does not prohibit it. Such clarification, hopefully, can reduce the need for companies to amend their Articles of Association.
However, issues concerning the failure of virtual meeting technology and its effect on the validity of a meeting are not addressed in the amendment bill. Hopefully, after the amendment bill is passed, further guidance about the conduct of virtual meetings would evolve with further elaborations coming from the Companies Registry and the Hong Kong Stock Exchange in relation to Hong Kong listed companies.
As the amendment proposal is in line with industry call, it is expected that the bill would be passed in the current legislative year. The amendment would take effect three months after the amendment ordinance is gazetted. A text of the gazetted amendment bill can be found in the link here.
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