The new companies ordinance share capital and reorganisation. May 05, 2014 under the old companies ordinance, there were restrictions on how a company could use the share premium which it received and how the share premium had to be accounted for. From a cpas perspective pdf version 3 march 2014 lam chi yuen nelson. Resolving shareholders disputes under the new companies. New corporate law a member firm of the pwc network 4 foreword this brief booklet is the first of a series to be released by the firm on the new companies ordinance, 2016 2016 ordinance. The new hong kong companies ordinance an overview 0805. 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. Major changes under the new companies ordinance, s chapter. Hong kong new companies ordinance hong kong business. Hong kong preparing for the new companies ordinance. The new hong kong companies ordinance major changes relating to share capital mr tim chung senior solicitor 18.
Hong kong preparing for the new companies ordinance introduction with the aim to further enhance hong kongs status as a major international business and financial centre, the hong kong legislative council passed the new companies ordinance the nco on 12 july 2012. Section 37 of schedule 11 requires that all share premium and capital redemption reserves that exist at the start date of the new ordinance shall become a part of the companys share capital. Capital reduction under the new companies ordinance relevant to pbe paper iv business law and taxation edward b. Effective date new co will come into operation on 3 march 2014. Companies ordinance gazette number version date long title. Subsequently, various amendments were proposed by the finance minister and. The new regime has become effective upon commencement of the new ordinance on 3 march 2014. Monthly return of equity issuer on movements in securities. New companies ordinance share capital charltons law. The essential corporate law in hong kong ilp abogados.
Acc hong kong the new companies ordinance share capital. On 3 march 2014, an entirely new hong kong companies ordinance cap. Unlimited companies without share capital are abolished. These changes also apply to shares issued before the start of the new ordinance. Nature and types a company is an artificial person created by law, having separate entity with a perpetual succession and a common seal. The new companies ordinance the commencement of the new companies ordinance, chapter 622 of the laws of hong kong, on 3 march 2014 will herald a new era for hong kongs company law. Hkfrs illustrative annual financial statements 2014. The new hong kong companies ordinance major changes relating to share capital mr tim chung senior solicitor 23. Besides, the new hong kong companies ordinance cap. Here is some information about the most important changes. Published on apr 3, 2014 in this legal update, we will discuss changes relating to reduction of capital, share buyback and financial assistance under the new companies ordinance. Par value was abolished with effect from 3rd march 2014 under the new companies ordinance cap 622.
Tong, chartered company secretary, barrister at law, author of the pbe paper iv study text introduction the new companies ordinance co cap. Since then, the courtfree procedures for reducing share capital and. Major changes under the new companies ordinance, s. Near apple, lemon, 2, false means to find documents having apple within 2 words apart from lemon. Revamping share capital restructure under the new companies. The highlights on each part of the new companies ordinance the new ordinance contained.
This chapter deals with the accounting for share capital of companies. Share capital the various reserves that irish companies were required to maintain was becoming cumbersome, and this is acknowledged by ca 2014. Rm 2401,world trade bldg, 500 guangdong rd, huangpu district, shanghai, china. An ordinance to reform and modernize hong kong company law. This issue forms the first of a series of newsletters on the new co. The new companies ordinance cap 622 co will come into operation probably in the first quarter of 2014. Effective date new co will come into operation on 3. A company usually raises its capital in the form of shares called share capital and debentures debt capital. The new companies ordinance the new co comes into effect on 3 march 2014. If a company issues new shares for consideration, then the full proceeds will be credited to the share capital account.
News flash hong kong tax courtfree the new companies ordinance an opportunity for corporate december 20 issue 14 in brief after a prolonged legislative by the legislative council legco in july 20 before its summer recess. The new companies ordinance an overview ms ada chung registrar of companies 8. The first quarter of 2014 heralds a new era for hong kongs company law with the commencement of the new companies ordinance cap. The new swedish companies act comes into force as from 1 january 2006.
This change is brought about by the new hong kong companies ordinance cap. Share capital restructuring for companies in hong kongpdf264kb. Under the old law, companies must also set out in their memorandum of association their authorised share capital and the par value of their shares. Revamping share capital restructure under the new companies ordinance the new companies ordinance the new co comes into effect on 3 march 2014. The current companies ordinance came into force in march 2014. This new legislation aims at modernizing the law and is drafted in plain english. This alert, being the first of a series of updates on the new companies ordinance, covers major changes in. Apple is good means to find documents having the exact phrase apple is good. Authorised share capital state currency balance at close of preceding month increasedecrease balance at close of the month total authorised share capital at the end of the month state currency. The new ordinance aims to achieve four main objectives, namely, enhancing corporate governance, facilitating business, ensuring better regulation and modernising. The new companies ordinance the new ordinance, which consists of 21 parts, 921 sections and 11 schedules is, i believe, one of the. If you want to match the order of words, specify near apple, lemon, 2, true a percent sign % can be used to match zero or more characters.
Companies ordinance, 1984 v reduction of share capital 96. All hong kong incorporated companies new provisions. Securities and exchange board of india is made for protect the interests of investors in securities and to promote the development of, and to regulate the securities market and for matters connected therewith or incidental thereto. Hong kong new companies ordinance hong kong business kaizen. This applies to both existing and new companies incorporated in hong kong. A strict reading of new companies ordinance suggests that the parent company has to be a hong kong company section 681 refers to the whollyowned subsidiaries of a company amalgamating, and a company is, in turn, defined as a company formed and registered under the new companies ordinance or an existing company. Finance act, 2014 a member firm of the pwc network a.
The classic shareholders dispute time and again we see disputes arising among the shareholders. In accordance with the hong kong new companies ordinance, effective from march 3rd 2014, every hong kong company must have at least one individual director. From the commencement date, all the provisions in the existing ordinance will be repealed and replaced by provisions in the new ordinance, except for the prospectus, and windingup and insolvency. Jonathan mok partner, mayer brown jsm loretta chan consultant, mayer brown jsm date.
Accounting for share capit al share and share capital. Revamping share capital restructure under the new companies ordinance. Full new companies ordinance chapter 622 companies registry. Apr 09, 2014 the new companies ordinance new companies ordinance will take effect on 3 march 2014. Objection by creditors and settlement of list of objecting creditors 75 100. The new ordinance does, however, contain transitional and deeming provisions relating to the migration to no par sections 35 to 41 of schedule 11 to the new ordinance. We now have the new concept of company capital, which is. In accordance with hong kong new companies ordinance there is no minimum issued share capital required for a hong kong limited liability company. The new companies ordinance new co is a comprehensive rewrite of the predecessor companies ordinance cap. 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. The new companies ordinance came into effect on 3 march 2014. New hong kong companies ordinance march 2014 page 2. The new co states that the amount of authorized capital set out in an existing.
This is a significant milestone for the development of company law in hong kong. The new companies ordinance highlights of some major. 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. Major changes relating to share capital under the new hong. Capital reduction under the new companies ordinance. The old co provides that, except where the company is a private company having a share capital, the annual return is required to be filed within 42 days after the agm for the year. This article examines the major changes in the company law as related to the aat examination paper 6 fundamentals of business law. This month the companies registry concludes its series of articles introducing the major changes brought in by the new companies ordinance. While most of the provisions in relation to company formation, administration and operation have been repealed, the windingup and insolvencyrelated provisions have been. Financial reporting under the new companies ordinance. Mayer brown jsm, 18f princes building, 10 chater road, central, hong kong. The new ordinance aims to achieve four main objectives, namely, enhancing corporate governance, facilitating business, ensuring better regulation and modernising hong kongs company law. Section 170 of the new co sets out the various methods by which a company can alter its share capital other than by redemption or repurchase of shares, including issuing new shares, capitalising profits, issuing bonus shares and effecting a share split or a share consolidation.
Highlights of companies amendment ordinance, 2018 the companies amendment ordinance, 2018 promulgated on november 02, 2018 thereby amending some of the sections of. Hk companies ordinance series 4 reduction of capital. The new co is a revamp of the hong kong company law regime base. The new ordinance was published in the government gazette in august 2012. All companies subject to filing requirements under the new co overview under the new co, a new set of specified forms is introduced for statutory filings with the companies registry. All companies subject to filing requirements under the new co overview under the new co, a new set of specified forms is introduced for. Finance act, 2014 the finance bill, 2014 was presented in national assembly on june 3, 2014. The companies share capital and debentures amendment rules, 2014 dated 18th june. There is no conversion process necessary for existing companies.
Full proceeds of any share issue after 3 march 2014 will be credited directly to the companys share capital, rather than being allocated between. Key changes under the 2014 hong kong companies ordinance. The seminar will give you an overview of the key points in the new companies ordinance that will impact share capital transactions, and will cover matters such as. A companys capital be it share capital, share premium or the like will now be reflected in one classification of share capital and any and all share premium and similar concepts will, after the coming into effect of the new companies ordinance, be deemed to be a reference to share capital.
The new companies act is contained in the swedish code of statutes, sfs 2005. Companies limited by guarantee, whether private or nonprivate, are categorized as a separate type of companies. Also affected will be share premium, capital redemption reserve and the requirement for authorised capital. Capital reduction under the new companies ordinance business. This alert, being the first of a series of updates on. Companies ordinance cap 622 part 1 relevant to aat. New requirements for shareholders approval before carrying out capital transactions. From 3 march 2014, all shares, whether issued before or after that date, will lose their nominal also known as par value.
768 1311 1504 718 201 1065 1218 259 1192 419 688 164 1242 574 753 552 11 52 747 1320 1450 790 1382 67 636 1622 596 500 1050 692 1030 1230 333 414 1326 1017 356 1260 1093 780 1205 698 1240 764