This publication contains an analysis of significant provisions of the ordinance. An overview on private mergers and acquisitions in hong. The shares shall convey to their holders pari passu the right. Law of companies part 1 general provisions article 1. The second form is to allow holders of partly paid shares to be relieved from their liabilities on the outstanding amounts. The new companies ordinance will extend this solvencybased buyback out of capital to all. Share capital a the authorized share capital of the. In this part, only a summary of key changes and new concepts of the 2016 ordinance have been identified. Cfreds third company law colloquium perspectives on.
A new section has been inserted to provide where a penalty in relation to a default. Broadly speaking, in our view, significant amendments in the ordinance. New hong kong companies ordinance briefing note 3 whats new for share capital. The name of the company is the tanzania chamber of commerce, industry and agriculture. New hong kong companies ordinance march 2014 page 2. Ii proposed increase in authorised share capital and iii notice of extraordinary general meeting introduction for further development and growth, the company is considering various fund raising options which may involve the issue of new shares or securities. The table below list all parts of the new companies ordinance and its schedules. The companies ordinance, chapter 32 company limited by. It is required to be filed by companies having share capital not later than 1st april in each year after incorporation or continuance under the ordinance. Tong, chartered company secretary, barrister at law, author of the pbe paper iv study text introduction the new companies ordinance co cap. Issue 4 january 2019 public governance guidance note. The companies ordinance, 1984 v reduction of share capital 96. Part 3 company formation and related matters and reregistration of company. While the new ordinance certainly brings in a number of measures to this effect, there is a sting in the tail which directors and company secretaries need to watch out for.
Part 2 registrar of companies and companies register. Please set the page orientation to landscape for printing of bilingual texts on a single page. A company is defined as a contract under which two or more persons undertake to participate in an enterprise for profit, by contributing a share in the form of money. The purposes for which the company was established are. The new companies ordinance new co is a comprehensive rewrite of the predecessor companies ordinance cap. Approval to allot and issue shares pursuant to section 57b of the companies ordinance the company is considering various fund raising options which may involve the issue of new shares. May 05, 2014 this month the companies registry concludes its series of articles introducing the major changes brought in by the new companies ordinance. Significant amendments in companies amendment ordinance, 2020. Also affected will be share premium, capital redemption reserve and. The new companies ordinance, which comes into force in march this year, has been billed as an attempt to simplify, rationalise and deregulate our company law wherever possible. To print the whole chapter in html, please click at the bottom of the toc panel and then click. As at the latest practicable date, the form and size.
Revamping share capital restructure under the new companies ordinance the new companies ordinance the new co comes into effect on 3 march 2014. The companies ordinance chapter 622 public company limited. The company has no authorised share capital and its shares have no par value from the commencement date of the new hong kong. New companies ordinance section in companies registrys web site. Streamlined and efficient the new co introduces a new corporate regime that is in many ways easier to follow for businesses. This issue forms the first of a series of newsletters on the new co. Reintroduction of section 11 omitted under the companies amendment act, 2015 after doing away with the requirements of minimum paid up capital to provide for a declaration by a company having share capital before it commences its business or exercises borrowing power. The new companies ordinance in hong kong new co is a comprehensive rewrite of the old companies ordinance cap. Broadly speaking, in our view, significant amendments in the ordinance may be classified as under. Capital reduction under the new companies ordinance business.
The core provisions affecting the operation of companies under the old co have been. Part 5 transactions in relation to share capital clic. In a share acquisition, all the assets, liabilities and obligations of the. Company formation and related matters, and reregistration of company 4. Part 4 share capital standing committee on company law reform. Par value, share premium, authorized capital outdated concepts section 5 provides that shares in a company have no nominal value.
A more fussfree regime the new cos amendments eradicate certain inconveniences in the co. New companies ordinance chapter 622 highlights share capital. This amendment ordinance, referred to here as the 2019. Capital reduction under the new companies ordinance. The regulations contained in the second schedule to the companies ordinance new version, 57431983 the companies ordinance shall not apply to the company. Twenty five essential things to know about the new. Share capital under the new co, the shares of a private company do not have any par value, i. Hong kong how does the new co affect accountants in preparing. Registration of alterations of share capital and of the surrender, redemption and reissue of shares. A company set up under section 42 of the companies. In previous briefing notes we have introduced the requirements of the new companies ordinance co cap.
Under the existing law, companies are allowed to buy back its own shares using distributable profits or using the proceeds of a fresh issue of shares. This ordinance repealed the existing companies ordinance, 1984 1984 ordinance. Cfreds third company law colloquium perspectives on the new. Miscellaneous provisions ordinance new accounting and audit requirements applicable to fs for period beginning on or after 3 march 2014 first set year ending 31 march 2015 3 we passionately develop quality programmes useful information new companies ordinance section in companies. This alert, being the first of a series of our updates on the new companies ordinance, covers major changes in relation to company formation, share capital and document execution. The companies amendment ordinance 2020 ordinance, was promulgated on 30 april 2020 and is applicable with immediate effect. Hong kong new companies ordinance hong kong business. Payment for shares issued for a consideration other than cash. Companies ordinance, 1984 licence from securities and exchange commission of pakistan g a trade organization us 42 of the companies ordinance, 1984 licence from ministry of commerce following are the requirements for registration of a new company under the companies ordinance, 1984. The new companies ordinance new co is a comprehensive rewrite of the predecessor companies. Hong kong how does the new co affect accountants in.
Ordinance new version, 57431983 the companies ordinance shall not apply. Part 4 share capital of the new companies ordinance new co contains provisions relating to the core concept of share capital and its creation, transfer and alteration. A company set up under section 42 of the companies ordinance. The shares in the original or any increased capital of the company may be issued with such preferred, deferred or other special rights or such restrictions whether in regard to. Guidebook on further issue of shares otherwise than. The shares shall convey to their holders thereof equal rights. Mandatory nopar shares for all companies with share capital simple example of the new nopar value regime 4 uses of the share capital account 5 increasing the amount of share capital andor altering the number of shares in a nopar environment 5 transitional provisions for moving to the nopar regime 10 appendices. Page 1 the hong kong companies ordinance 2018 k eeping of accounting records under the new companies ordinance co, audit of financial statements is still required for all companies except dormant companies section 373 of the new co requires a company to keep accounting records which are sufficiently to. Hong kongs new companies ordinance chapter 622 new co will be. Upon liquidation of the company, however the creditors right shall be transferred to his debtors share in. Critical evaluation of headcount test removal under the new. Under the new co, public companies may effect share redemption, repurchase or reduction, which is a change from the position under the existing companies ordinance the co under which only private companies may do so. The authorized share capital of the company shall be rs. Capital reduction under the new companies ordinance relevant to pbe paper iv business law and taxation edward b.
The new co has prescribed a set of model articles that you can use, or, as in the past you can tailor make a set of articles of association for your hong kong companies ss. The companies ordinance chapter 622 public company. The new companies ordinance series 4 reduction of capital. This applies to companies both under the new system and the old regime.
The name of the company is the hong kong college of family. Adopted by special resolution passed on 29 day of july, 1998 preliminary 1. The new companies ordinance series 1 company formation. In this final article in the series, ada chung, registrar of companies, and phyllis mckenna, deputy principal solicitor, hksar government, look in more detail at two major initiatives of the new law, namely, the abolition of the memorandum of association. Dec 10, 20 the new companies ordinance new companies ordinance will take effect on 3 march 2014. Highlights of companies amendment ordinance, 2018 the companies amendment ordinance, 2018 promulgated on november 02, 2018 thereby amending some of the sections of. Similar to the old ordinance, section 149 of the new co allows capital to be applied in writing off the preliminary expenses of the company.
New hong kong companies ordinance briefing note 5 overview of amendments introduced by the companies amendment no. Briefing note 5 overview of amendments introduced by the. Nature and transferability of shares 1 a share or other interest of a member in a company is personal property. Twenty five essential things to know about the new companies. On 3 march 2014, an entirely new hong kong companies ordinance cap.
Such commissions may be satisfied by the payment of cash or the allotment of fully or partly paid shares in the capital of the company or partly in one way and partly in the other. Objection by creditors and settlement of list of objecting creditors 75 100. Doc critical evaluation of headcount test removal under. Public company this company is a public company, as such term is defined in the companies ordinance. Sep 06, 20 3 sets out the types of companies that may be formed under the new co, namely a. Par value also known as nominal value is the minimum price at which shares can generally be issued. An overview on private mergers and acquisitions in hong kong. The registered office of the company will be situated in the united. For private companies, share buyback out of capital is also permissible based on a solvency test. Solvency test the new ordinance modifies the maintenance of capital rules by introducing a solvency test for the following types of share capital transactions. Maintenance of capital and share capital transactions 6. The regulations contained in the second schedule to the companies ordinance. Revamping share capital restructure under the new companies. Allowing all companies to purchase their own shares out of capital subject to a solvency test part 5 5.
Jun 05, 2014 or conditional, for any shares in the share capital of the company as conferred by the ordinance to the full extent thereby permitted. An update for real estate developers and investors. Part 5 transactions in relation to share capital 6. Section 211 provides that where it is proved to the satisfaction of the registrar that an.
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