New Companies Ordinance 2014

The New Companies Ordinance in Hong Kong
On 3rdMarch 2014, the new HK companies Ordinance will be effective.  Upon implementation of the new CO:
- Companies Ordinance (Cap.32)(“Cap.32”) is retitled as “Companies (Winding up and 
  Miscellaneous provisions) Ordinance(Cap.32)”.
- All the core provisions affecting the operation of companies in Cap.32 are repealed, except
  those provisions relating to prospectuses, winding-up, insolvency of companies and
  disqualification of directors.

“New CO” Highlights of major changes
A. Constitutional Document and Common Seal
     1、Abolition of Memorandum
        • Memorandum of Association is abolished for all local companies.
        • Articles of Association is the constitutional document of a company.
        • For companies registered under Cap.32(“existing companies”), current provisions in 
             their Memorandum of Association will be regarded as provisions of their Articles of 
        • Table A in the First Schedule to Cap.32, in so far as not modified by the provisions of 
             the new CO, will continue to apply to existing companies which adopt Table A as 
             their Articles of Association.

     2、Model Articles
         • Model Articles are prescribed under the new CO for use by private companies
              by shares, public companies and companies limited by guarantee.

     3、 Common Seal
            The keeping and use of a common seal becomes optional.

B. Share Capital
     1、Mandatory Regime of No-par
        • A company’s shares will have no nominal value.
        • The new regime applies to all local companies with a share capital.
        • The new CO contains transitional and deeming provisions relating to the move from 
             par value shares to no-par value shares to facilitate a smooth transition.
        • All shares issued before the commencement date of the new CO are deemed to 
             have no par value. Conversion process is not required.
        • Amounts standing to the credit of a company’s share premium account and capital
             redemption reserve account become part of the company’s share capital.
        • Individual companies may review their particular situation to determine if specific 
             changes to their constitutional documents, contracts entered into by the companies
             etc. are required, having regard to their circumstances.

     2、Statement of Capital
         • A statement of capital is included in a return or notice in a specified form, which is
              required to be delivered for registration whenever there is a change in a company’s 
              share capital, e.g. an allotment of shares or a permitted alteration of share capital.
         • The statement is a ‘snapshot’ of a company’s latest share capital. It will ensure 
              disclosure of up-to-date share capital information.

C. Directors
     1、Restricting Corporate Directorship
        • Every private company must have at least one director who is a natural person.
        • A grace period of 6 months after the commencement date of the new CO is
             provided for existing companies to comply with the new requirement.
        • Notifications of changes of directors should be delivered for registration in the 
             specified form ND2A within 15 days of the changes.

     2、Long Term Service Contract
        • Member’s approval is required for an employment contract of a director
             exceeding 3 years.

D. Annual Returns and Accounts
     1、 Private Company
         • No change in the filing requirements. Annual return should be filed within 42
              days after the return date, i.e. the anniversary of the date of the company’s

     2、 Public Company and Guarantee Company
            If the financial year of a company begins before the commencement date of
            the new CO and ends on or after that date:
         • The annual return should continue to be filed within 42 days after the date 
              of the company’s Annual General Meeting (AGM).
            For a financial year which begins on or after the commencement date of 
            the new CO:
         • The annual return should be filed within 42 days after the company’s 
               return date.
         • The return date for a public company is 6 months after the end of the
               company’s accounting reference period.
         • The return date for a guarantee company is 9 months after the end of the 
              company’s accounting reference period.
         • Accounting reference period is the period by reference to which the
              company’s annual financial statements are to be prepared.
         • Late submission of annual returns, for all types of companies stated above, 
              is subject to higher registration fees.
         • An Annual Return in the form of a Certificate of No Change (Forms AR2 or 
              AR3)will become obsolete and will not be accepted for registration under
              the new CO.

     3、 Accounts and Reports
         • Small and medium enterprises (SMEs) may prepare simplified financial 
              statements and directors’reports.
         • A private company is qualified for simplified reporting if it satisfies any two
              of the following conditions:
              a) Total annual revenue does not exceed HK$100 million;
              b) Total assets does not exceed HK$100 million;
              c) Average number of employees during the financial year does not 
                  exceed 100.
         • You are advised to seek professional advice if you wish to prepare simplified 
               financial statements and directors’ reports.

E. Delivery of Documents
     • If the Registrar of Companies (the Registrar) has not received a document , the 
       document  will be regarded as not having been delivered to the Register in
       satisfaction of the provisions of the new CO.

F. Meetings
    General Meetings
    • Companies may dispense with the holding of AGMs by unanimous shareholders’ 
    • AGMs should be held with reference to the accounting reference period.
    • A general meeting can be held at more than one location by using any technology.

G. Charges
    • A certified copy of the instrument creating or evidencing a charge or a certified copy 
       of any instrument evidencing satisfaction or release of a charge is required to be
       delivered with the relevant specified form to the Registrar for registration.
    • The time for registration of a charge is shortened from 5 weeks to one month.
    • The instrument and the specified form will both be filed and made available for
       public inspection.
    • Certified copies of instruments will not be returned to presenters after registration.

    • A copy of an instrument is a certified copy if it is certified as a true copy by a director
       or company secretary or a person authorized by the company or by any other person 
       interested in the charge.