The New Companies Ordinance
Breaking New Ground and Facilitating Business
Companies Registry

Exemplary Services@Gov
2015
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The Companies Registry believes that a modernised legal framework is essential for further enhancing the regime of company registration and regulation in Hong Kong. The new Companies Ordinance (CO), which came into effect on 3 March 2014, seeks to facilitate business, enhance corporate governance, and ensure better regulation. The new CO provides a modernised legal framework for the incorporation and operation of companies in Hong Kong, and strengthens Hong Kong’s status as an international financial and commercial centre.

Enhance corporate governance and lower compliance costs

The new CO introduced various measures to facilitate business by simplifying statutory procedures and reducing compliance costs. For example, the new CO has abolished the Memorandum of Association, made the use of common seals optional, and extended simplified reporting to small and medium enterprises.

The new CO also provides an alternative court-free procedure for the reduction of a company’s capital. In the first financial year after the commencement of the new CO, 133 companies adopted the new court-free procedure to reduce their capital, representing a tenfold increase in the total number of companies which reduced their capital in 2013-2014.

Apart from this, the new CO strengthens the protection of minority investors by requiring directors to provide more detailed disclosure of conflicts of interest. The requirements were commended by the World Bank in its report on Doing Business 2015. Hong Kong’s global ranking in protecting minority investors has moved up from third to second.

Comprehensive planning ensures a seamless transition

To ensure a smooth transition to the new regime, the Registry undertook preparatory work on several fronts, including overhauling its information system, specifying a total of 92 new forms, and providing specimens of completed forms and samples of Articles of Association for the public. The Registry also provided a series of training programmes for its staff, re-engineered workflows and revised internal guidelines, thereby ensuring that the Registry’s staff are fully equipped to carry out their duties under the new CO and better serve its customers.

The Registry spared no efforts and proactively communicated with the public through various channels to promote the new law. Other than issuing circulars, guidelines and other publications, the Registry also set up a dedicated thematic section on the Registry’s website to provide comprehensive information on the new Ordinance and a dedicated hotline for answering public enquiries. In addition, the Registry organised and participated in many briefing sessions. It also engaged the mass media and professional bodies to promote a better understanding of the new CO among the public and relevant stakeholders. The transition to the new CO has been very smooth - in the first week of implementation, the usage rate of new forms for incorporation applications was close to 100%, and the usage rate of other forms also reached almost 100% upon the expiry of the 3-month transition period.

Through rewriting the Companies Ordinance, the Companies Registry has modernized our company law. This not only facilitates business, but also enhances corporate governance and ensures better regulation.

The new Companies Ordinance strengthens Hong Kong’s status as an international financial and commercial centre.
The new Companies Ordinance strengthens Hong Kong’s status as an international financial and commercial centre.
The Registry hosted and participated in over 70 briefing sessions, attracting over 16,000 attendees in total.
The Registry hosted and participated in over 70 briefing sessions, attracting over 16,000 attendees in total.
The Registry provided a series of training programmes for its staff and the service support teams to ensure a smooth transition to the new regime.