Companies Ordinance (Cap.622)

The Companies Ordinance (Cap.622) is expected to come into force in 2014. The new Ordinance is a complete rewrite, with 921 sections and 11 schedules, and it is imperative that lawyers, accountants, compliance officers, other professionals, and academics become fully conversant with the new provisions.

Some of the major changes include:

• Tightening of criminal liability for “responsible persons”
• Model and mandatory articles
• Adoption of uniform insolvency test
• Codification of the common law duty of directors’ care, skill and diligence
• Widening of ambit of disclosure of material interest
• Holding general meetings through technology
• Court free procedure for amalgamations of intra-group companies
• Extensions to unfair prejudice remedy, statutory derivative action, members’ inspection of company records and statutory injunction remedy
• Modernisation of investigative powers
• Security for costs extended to company registered outside Hong Kong

For the first time, the full text of the Ordinance is available, together with an Introduction by Ted Tyler, Stefan Lo and Natalie Wong, the Companies Ordinance Rewrite Team, Department of Justice, which highlights the major changes and the guiding principles behind the new Ordinance.

This should be on the desk of every lawyer, accountant and other professional whose practice will be affected.