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The third public consultation on the Companies Ordinance rewrite, covering share capital, the capital maintenance regime and statutory amalgamation procedure, was launched by the Government today (June 26).
This three-month consultation, from today to September 30, is the third of a series of consultations in the course of the Companies Ordinance rewrite exercise.
Following is a summary of the points covered in this consultation :
* Share Capital
The government proposes to introduce a mandatory no-par value share regime for all companies (i.e. shares will no longer have par or nominal value) and provide a period of 12 months for companies to review their arrangements before migration to no-par. The consultation document also proposes to make other consequential and related amendments following the migration to no-par.
Under the existing arrangements, companies incorporated in Hong Kong and having a share capital are required to have a par value ascribed to their shares. Each share therefore has a fixed face value that is its par value, which is the minimum price at which shares can generally be issued.
* The Capital Maintenance Regime
The Government does not recommend adopting an across-the-board solvency test approach to distributions of all forms. Nevertheless, the government would like to invite views on whether the existing capital maintenance rules concerning reduction of capital, purchase by a company of its own shares and financial assistance by a company to another party for the acquisition of its own shares should be streamlined or modified.
* Statutory Amalgamation Procedure
The government would consider introducing a court-free statutory amalgamation procedure in Hong Kong in addition to the existing court-sanctioned procedure.
A government spokesman said today,¡°While looking forward to views from all interested parties and stakeholders on the proposals, we would also like to thank the Standing Committee on Company Law Reform (SCCLR) and the relevant advisory group comprising representatives from professional and business organisations, academics and members of the SCCLR for their invaluable advice and recommendations offered.¡±
The Companies Ordinance rewrite exercise began in mid-2006 with a view to modernising company law and enhancing Hong Kong¡¯s competitiveness and attractiveness as an international business and financial centre.
The second consultation on company names, directors¡¯duties, corporate directorship and registration of charges began on April 2 and will close next Monday (June 30).
¡°If any parties have comments on the second consultation but have not yet submitted their views, they are most welcome to do so by next Monday,¡± the spokesman said.
The views collected from all these consultations will be considered for incorporation into a draft bill to be issued for public consultation in mid-2009. The new Companies Bill is tentatively scheduled to be introduced into the Legislative Council in the third quarter of 2010.
The consultation document on this third consultation can be downloaded from http://www.fstb.gov.hk/fsb. Comments and submissions should be sent by mail to the Companies Bill Team, Financial Services and the Treasury Bureau, 15/F, Queensway Government Offices, 66 Queensway, Hong Kong, or by fax to (852) 2869-4195 or by email to co_rewrite@fstb.gov.hk on or before September 30.
Ends/Thursday, June 26, 2008
Issued at HKT 16:30
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