[Company Secretary] practical useful miscellaneous sundry points [Summary]

Question

[Company Secretary] practical useful miscellaneous sundry points [Summary]

Point 1: 2 mainly used company secretary software in Hong Kong

Point 2: Q&A relating to court-free amalgamation provided by HKICPA

Point 3: Definition of Ordinary resolution and special resolution

Point 4: Question: how right of member and director to inspect accounts and other records of the company is ground?

Point 5: Any thing can do if another company has its name almost the same with your company?

Point 6: Why in current Company Ordinance, common seal isn't necessary for a company?

Point 7: Company with sole one member not required to hold annual general meeting and by all members' resolution, Dispensation with AGM is allowed

Point 8: written resolution can in lieu of meeting (covering both of members' and directors')

Point 9: special resolution or its equivalent needed to be filed to CR within 15 days

Point 10: Unlimited company may apply for re-registration as company limited by shares

Point 11: Company with corporate director can't use e-Registry for its incorporation

Point 12: Private company - can have sole director and at least one natural director / Company Limited by guarantee & Public Company - at least 2 directors and all directors must be natural

Point 13: Company Ordinance resource provided by CR and other bodies: Table of Origin / Table of Destination (from Companies Ordinance (Cap. 32) to new Companies Ordinance) / Highlights / CR Highlights of Prosecution Cases, etc.

Point 14: Registration of Non-Hong Kong Company in Hong Kong CR (need to register within one month of the establishment of a place of business in Hong Kong)

Point 15: matters need to be approved by special resolution and file to CR

Point 16: how can I get a Certificate of Incumbency for a Hong Kong company?

Point 17: resources for setting up a charitable bodies

Point 18: Consequence for Share Capital in high amount and suggestion to client for its reduction

Point 19: using CR's electric search services to find out a natural person being which companies' director

Point 20: where to see if members of a company have priority right to acquired other members' shares when the shares are going to sell?

Point 21: can I recover my ordered documents from CR's Cyber Search Center if I already loss my paid order's Order Number and Order Enquiry Reference Number?

Point 22: what's apostille and how to handle it?

Point 23: what if all directors of a company have resigned?

Point 24: The three basic rules of interpretation of Company Ordinance

Point 25: restriction on share transfer for private company

Point 26: specified charge need to be registered

Point 27: Any alternative to fill in cell 8 mortgages and charges of NAR1 if didn't know the accurate charge amounts

Point 28: basic rules for auditors acting as company secretary

Point 1: 2 mainly used company secretary software in Hong Kong:

1, CSA: http://www.plsoft.com/240-2/

(have one-off license payment)

2, CAS: https://www.bglcorp.com/hong-kong/

(No one-off license, only yearly payment)

asked Oct 1, 2018 by Kangkewen (10k points)

27 Answers

Kangkewen · Answer 1 · 2018-10-01T04:37:59+0000

Point 2: Q&A relating to court-free amalgamation provided by HKICPA:

http://www.hkicpa.org.hk/file/media/section6_standards/standards/co/faq_amalg.pdf

Kangkewen · Answer 2 · 2018-10-01T05:27:23+0000

Point 3: Point 3: Definition of Ordinary resolution and special resolution

Definition of Ordinary resolution:

Section 563 of Company Ordinance (Cap. 622):

(1) An ordinary resolution of the members (or of a class of members) of a company means a resolution that is passed by a simple majority.
(2) A resolution passed at a general meeting on a show of hands is passed by a simple majority if it is passed by a simple majority of the total of the following—
- (a) the number of the members who (being entitled to do so) vote in person on the resolution;
- (b) the number of the persons who vote on the resolution as duly appointed proxies of members entitled to vote on it.
(3) A resolution passed on a poll taken at a general meeting is passed by a simple majority if it is passed by members representing a simple majority of the total voting rights of all the members who (being entitled to do so) vote in person or by proxy on the resolution.
(4) Anything that may be done by an ordinary resolution may also be done by a special resolution.

Definition of special resolution:

Section 564 of Company Ordinance (Cap. 622):

(1) A special resolution of the members (or of a class of members) of a company means a resolution that is passed by a majority of at least 75%.
(2) A resolution passed at a general meeting on a show of hands is passed by a majority of at least 75% if it is passed by at least 75% of the total of the following—
- (a) the number of the members who (being entitled to do so) vote in person on the resolution;
- (b) the number of the persons who vote on the resolution as duly appointed proxies of members entitled to vote on it.
(3) A resolution passed on a poll taken at a general meeting is passed by a majority of at least 75% if it is passed by members representing at least 75% of the total voting rights of all the members who (being entitled to do so) vote in person or by proxy on the resolution.
(4) If a resolution is passed at a general meeting—
- (a) the resolution is not a special resolution unless the notice of the meeting included the text of the resolution and specified the intention to propose the resolution as a special resolution; and
- (b) if the notice of the meeting so specified, the resolution may only be passed as a special resolution.
(5) A reference to an extraordinary resolution of a company or of a meeting of any class of members of a company—
- (a) contained in any Ordinance that was enacted or document that existed before 31 August 1984; and
- (b) deemed, in relation to a resolution passed or to be passed on or after that date, to be a special resolution of the company or meeting under section 116(5) of the predecessor Ordinance,
continues to be deemed to be such a special resolution of the company or meeting.

Kangkewen · Answer 3 · 2018-10-01T06:02:28+0000

Point 4: how right of member and director to inspect accounts and other records of the company is ground?

Answer for member's right: 2 steps to find out a company's member's right to inspect:

1st step: look at ARTICLES OF ASSOCIATION of the company. If you are using standard template provided by CR, see:

Section 73. No right to inspect accounts and other records

A person is not entitled to inspect any of the company's accounting or other records or documents merely because of being a member, unless the person is authorized to do so by-

(a) enactment;
(b) an order under section 740 of the Ordinance;
(c) the directors; or
(d) an ordinary resolution of the company.

If you want your company be difference with this, you need to make amendment on this;

2nd step:

Relevant Company Ordinance (Cap. 622) clauses (extra only):

Section: 740

Heading: Court may order inspection of records or documents

(1) On application by a required number of a company’s members, the Court may make an order—

(a) authorizing a person who is the applicant or one of the applicants to inspect any record or document of the company; or
(b) authorizing a person who is not the applicant or one of the applicants to inspect any record or document of the company on behalf of the applicant or applicants.

(2) The Court may make an order authorizing a person to inspect a record or document if it is satisfied that—

(a) the application is made in good faith; and
(b) the inspection is for a proper purpose.

(3) If the Court makes an order authorizing a person to inspect a record or document, the person may, unless the Court otherwise orders, make copies of the record or document.

(4) If the Court makes an order authorizing a person to inspect a record or document, it may make any other order that it thinks fit, including—

(a) an order requiring the company, or an officer of the company, to produce any record or document to the person;
(b) an order specifying the record or document that may be inspected by the person;
(c) an order requiring the applicant to pay the expenses reasonably incurred by the company in the inspection; and
(d) an order permitting the person or, if the person is not the applicant, the applicant to disclose any information obtained as a result of the inspection to any other person specified in the order.

(5) A person who complies with an order made under subsection (1) or (4) does not incur any civil liability by reason only of the compliance.

(6) In this section, a reference to a required number of a company’s members is a reference to—

(a) the number of members that represents at least 2.5% of the voting rights of all the members having a right to vote at the company’s general meetings at the date of application; or
(b) at least 5 members of the company.

Answer for director's right: Under Company Ordinance, director has right to access company's accounting records.

Relevant Company Ordinance (Cap. 622) clauses (extra only):

Section: 374 Where accounting records to be kept

(1) A company’s accounting records—

(a) must be kept at its registered office or any other place that the directors think fit; and
(b) must be open to inspection by the directors at all times without charge.

Section 375 Director may obtain copies of accounting records during inspection

(1) A company must allow a director of the company to make a copy of its accounting records in the course of inspection.

(2) A company must provide a director of the company with a copy of its accounting records without charge if so requested by the director.

Kangkewen · Answer 4 · 2018-10-06T10:20:02+0000

Point 5: Any thing can do if another company has its name almost the same with your company?

Yes. Can write an objection letter to Registrar and Registrar may take action, based on following Section of Company Ordinance:

Section 108

Registrar may direct company to change same or similar name etc.

(1) The Registrar may by notice in writing direct a company to change, within the period specified in the notice, a name by which the company is registered under this Ordinance or the predecessor Ordinance if—

(a) the name is, as at the time of the registration, the same as or in the Registrar’s opinion too like a name that appeared or should have appeared in the index of names kept under section 22C of the predecessor Ordinance or in the Index of Company Names;
(b) the name is, as at the time of the registration, the same as or in the Registrar’s opinion too like a name of a body corporate incorporated or established under an Ordinance;
(c) it appears to the Registrar that misleading information has been given for the company’s registration by the name;
(d) it appears to the Registrar that any undertaking or assurance given for the registration by the name has not been fulfilled; or
(e) the name is a name by which, as at the time of the registration, the company must not be registered because of section 100(2)(a) or (b).

(2) The Registrar may by notice in writing direct a company to change, within the period specified in the notice, a name by which the company is registered under this Ordinance or any former Companies Ordinance if, after the company is registered by the name—

(a) a court makes an order restraining the company from using the name or any part of the name; and
(b) an office copy of the order, and a notice in the specified form, are delivered to the Registrar for registration by a person in whose favour the order is made.

(3) A direction may only be given—

(a) in the case of subsection (1)(a) or (b), within 12 months after the date of registration by the name;
(b) in the case of subsection (1)(c) or (d), within 5 years after the date of registration by the name; and
(c) in the case of subsection (1)(e), within 3 months after the date of registration by the name.

(4) The Registrar may, before the end of the period specified in a notice given under subsection (1) or (2), by notice in writing extend the period.

(5) If a company fails to comply with a direction within the period specified in the notice or, if the period is extended under subsection (4), within the extended period, the company, and every responsible person of the company, commit an offence, and each is liable to a fine at level 6 and, in the case of a continuing offence, to a further fine of $2,000 for each day during which the offence continues.

Kangkewen · Answer 5 · 2018-10-08T02:04:46+0000

Point 6: Why in current Company Ordinance, common seal isn't necessary for a company?

Under previous Company Ordinance, common seal is necessary when a company want to execute a deed.

Under new Company Ordinance enacted in 2014, a company can execute a deed with all of its directors' signature.

Knowledge about deed:

Under English law, there are two forms of a written contract – a simple contract and a deed. The practical difference between a simple contract and a deed is that there are additional formalities to execute a deed.
In a banking context, as a rule of thumb, English law powers of attorney and security documents are executed as deeds. It is also common for intercreditor agreements to be executed as deeds.

Source of knowledge of deed: http://www.nortonrosefulbright.com/files/deeds-115024.pdf

Pursuant to the provisions of the Conveyancing and Property Ordinance (Cap. 219) (“the CPO”), an assignment, a charge/mortgage or other disposal of legal estate in land has to be made by deed.

Also can refer to CR Q&A about Common Seal:

https://www.cr.gov.hk/en/companies_ordinance/faq_common_seal.htm#04

answered Oct 8, 2018 by Kangkewen (10k points)

Relevant Company Ordinance (Cap. 622) clauses (extra only):

Section: 127

Heading: Execution of documents by company

(1) A company may execute a document under its common seal.
(2) If a company executes a document under its common seal, the seal must be affixed in accordance with the provisions of its articles.
(3) A company may also execute a document—

(a) in the case of a company with only one director, by having it signed by the director on the company’s behalf; or
(b) in the case of a company with 2 or more directors, by having it signed on the company’s behalf by—
- (i) the 2 directors or any 2 of the directors; or
  (ii) any of the directors and the company secretary of the company.

(4) For the purposes of subsection (3), if a person is to sign a document on behalf of 2 or more companies, the person must sign the document separately in each capacity.
(5) A document signed in accordance with subsection (3) and expressed (in whatever words) to be executed by the company has effect as if the document had been executed under the company’s common seal.
(6) In favour of a person specified in subsection (7), a document is to be regarded as having been executed by a company if the document purports to have been signed in accordance with subsection (3).
(7) The person is a purchaser in good faith for valuable consideration and includes—

(a) a lessee;
(b) a mortgagee; or
(c) any other person who for valuable consideration acquires the property.

(8) This section also applies to a document that is executed, or purports to be executed, by a company in the name of or on behalf of another person whether or not that other person is also a company.

commented Oct 8, 2018 by Kangkewen (10k points)

Relevant Company Ordinance (Cap. 622) clauses (extra only):

Section: 128

Heading: Execution of deeds by company

(1) A company may execute a document as a deed by—

(a) executing it in accordance with section 127;
(b) having it expressed (in whatever words) to be executed by the company as a deed; and
(c) delivering it as a deed.

(2) For the purposes of subsection (1)(c), a document is presumed, unless the contrary is proved, to be delivered as a deed on its being executed in accordance with section 127.

(3) If there is any conflict or inconsistency between this section and the provisions of any other Ordinance, this section prevails over those provisions to the extent of the conflict or inconsistency.

Relevant Company Ordinance (Cap. 622) clauses (extra only):

Section: 127

Heading: Execution of documents by company

(1) A company may execute a document under its common seal.

(2) If a company executes a document under its common seal, the seal must be affixed in accordance with the provisions of its articles.

(3) A company may also execute a document—

(a) in the case of a company with only one director, by having it signed by the director on the company’s behalf; or
(b) in the case of a company with 2 or more directors, by having it signed on the company’s behalf by—
- (i) the 2 directors or any 2 of the directors; or
- (ii) any of the directors and the company secretary of the company.

commented Oct 20, 2018 by Kangkewen (10k points)

Kangkewen · Answer 6 · 2018-10-20T05:19:48+0000

Point 7: Company with sole one member not required to hold annual general meeting and by all members' resolution, Dispensation with AGM is allowed

Relevant Company Ordinance (Cap. 622) clauses (extra only):

Section: 612

Heading: Circumstances in which company not required to hold annual general meeting

(1) A company is not required to hold an annual general meeting in accordance with section 610 if—

(a) everything that is required or intended to be done at the meeting (by resolution or otherwise) is done by a written resolution; and
(b) a copy of each document that under this Ordinance would otherwise be required to be laid before the company at the meeting or otherwise produced at the meeting is provided to each member, on or before the circulation date of the written resolution.

(2) A company is also not required to hold an annual general meeting in accordance with section 610 if—

(a) the company has only one member; or
(b) all of the following are satisfied—
- (i) the company has by resolution passed in accordance with section 613(1) dispensed with the holding of the annual general meeting;
- (ii) the company has not revoked the resolution under section 614(1), or the company has revoked the resolution under that section but is not required to hold an annual general meeting under section 614(2)(b);
- (iii) no member of the company has required the holding of the annual general meeting under section 613(5).

Section 613

Heading: Dispensation with annual general meeting

(1) A company may, by resolution passed in accordance with subsection (3), dispense with the holding of annual general meetings in accordance with section 610.

(2) resolution mentioned in subsection (1) may be passed by a written resolution or at a general meeting.

(3) Despite any other provision of this Ordinance, a resolution mentioned in subsection (1) is only to be regarded as passed if it has been passed by all members of the company who—

(a) are entitled to vote on the resolution on the date of the resolution; or
(b) in the case of a written resolution, are entitled to vote on the resolution on the circulation date of the resolution.

Kangkewen · Answer 7 · 2018-10-20T05:54:35+0000

Point 8: written resolution can in lieu of meeting (covering both of members' and directors')

Relevant Company Ordinance (Cap. 622) clauses (extra only):

Section: 548

Heading: written resolution

(1) Anything that may be done by a resolution passed at a general meeting of a company may be done, without a meeting and without any previous notice being required, by a written resolution of the members of the company.

(2) Anything that may be done by a resolution passed at a meeting of a class of members of a company may be done, without a meeting and without any previous notice being required, by a written resolution of that class of members of the company.

(3) If a resolution is required by any Ordinance to be passed as an ordinary resolution or a special resolution, the resolution may be passed as a written resolution; and a reference in any Ordinance to an ordinary resolution or a special resolution includes a written resolution.

(4) A reference in any Ordinance to the date of passing of a resolution or the date of a meeting is, in relation to a written resolution, the date on which the written resolution is passed under section 556.

(5) A written resolution of a company has effect as if passed by—

(a) the company at a general meeting; or
(b) a meeting of the relevant class of members of the company,

as the case may be, and a reference in any Ordinance to a meeting at which a resolution is passed or to members voting in favour of a resolution is to be construed accordingly.

(6) This section does not apply to—

(a) a resolution removing an auditor before the end of the auditor’s term of office; or
(b) a resolution removing a director before the end of the director’s term of office.

Section: 549

Heading: Written resolution

A resolution may be proposed as a written resolution by—

(a) the directors of a company; or
(b) a member of a company.

Kangkewen · Answer 8 · 2018-10-20T07:24:54+0000

Point 9: special resolution or its equivalent needed to be filed to CR within 15 days

Relevant Company Ordinance (Cap. 622) clauses (extra only):

Section: 622

Heading: Registration of and requirements relating to certain resolutions, etc.

(1) This section applies to—

(a) a special resolution, other than a special resolution to change the name of a company passed under section 107or 770;
(b) a resolution agreed to by all the members of a company that, if not so agreed to, would not have been effective for its purpose unless passed as a special resolution;
(c) a resolution or agreement agreed to by all the members of a class that, if not so agreed to, would not have been effective for its purpose unless passed by some particular majority or otherwise in some particular manner;
(d) a resolution or agreement that effectively binds all the members of a class though not agreed to by all those members;
(e) an agreement made for the purposes of section 359(1)(b)(iii);
(f) a resolution passed for the purposes of section 360(1)(a), (2)(a)(i), (2)(b)(i) or (2)(c)(i);
(g) a resolution passed under section 613;
(h) a resolution requiring a company to be wound up voluntarily, passed under section 228(1)(a) of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32);
(i) a resolution varying any matter or provision in the articles of a company that is expressly authorized by the articles to be varied by ordinary resolution;
(j) an order of the Court (which alters a company’s articles) a copy of which is required to be delivered to the Registrar under section 96; and
(k) an order of the Court which alters a resolution or an agreement referred to in paragraph (a), (b), (c), (d), (e), (f), (g), (h) or (i).

(2) The company must deliver a copy of the order under subsection (1)(k), resolution or agreement to the Registrar for registration within 15 days after it is made or passed.

(3) The company must ensure that a copy of the resolution, agreement or order of the Court that is for the time being in force is included in or annexed to every copy of the articles issued, as the case may be—

(a) after the passing of the resolution; or
(b) after the making of the agreement or the order of the Court.

(4) Subsection (3) does not apply to an existing company whose articles have not been registered under this Ordinance or any former Companies Ordinance.

(5) If the company is an existing company whose articles have not been registered under this Ordinance or any former Companies Ordinance, the company must send a copy of the resolution, agreement or order of the Court that is for the time being in force to any member at that member’s request, without charge.

(6) If the resolution or agreement is not in writing, a reference to a copy of the resolution or agreement in subsections (2), (3) and (5) is to be construed as a written memorandum setting out the terms of the resolution or agreement.

(7) If a company contravenes subsection (2), the company, and every responsible person of the company, commit an offence, and each is liable to a fine at level 3 and, in the case of a continuing offence, to a further fine of $300 for each day during which the offence continues.

(8) If a company contravenes subsection (3) or (5), the company, and every responsible person of the company, commit an offence, and each is liable to a fine at level 3.

(9) For the purposes of subsections (7) and (8), a liquidator or provisional liquidator of the company is to be regarded as an officer of the company.

Kangkewen · Answer 9 · 2018-10-26T05:51:14+0000

Point 10: Unlimited company may apply for re-registration as company limited by shares

Relevant Company Ordinance (Cap. 622) clauses (extra only):

Section: 130

Heading: Unlimited company may apply for re-registration as company limited by shares

(1) A company registered as an unlimited company on or after 31 August 1984 may be re-registered as a company limited by shares if the company—

(a) passes a special resolution specified in subsection (2); and
(b) delivers to the Registrar for registration an application in accordance with section 131.

(2) The special resolution—

(a) must resolve that the company is to be re-registered as a company limited by shares;
(b) must state the manner in which the liability of the members is to be limited on the re-registration;
(c) must provide for the alterations to the company’s articles that are necessary to bring the articles into conformity with the requirements of this Ordinance in respect of the articles of a company to be formed under this Ordinance as a company limited by shares;
(d) must contain a statement specified in subsection (3); and
(e) may state the maximum number of shares that the company may issue.

Kangkewen · Answer 10 · 2018-10-29T01:33:06+0000

Point 11: Company with corporate director can't use e-Registry for its incorporation

Corporate director needs to sign on the NNC1 form. The signature can't be done by e-signature. The format of a corporate's signature is chop the company chop/seal with beside authorized natural person's physical signature.

Kangkewen · Answer 11 · 2018-10-29T01:49:28+0000

Relevant Company Ordinance (Cap. 622) clauses (extra only):

Section: 456

Heading: Restriction on body corporate being director

(1)

This section applies to—

(a)

a public company;

(b)

a private company that is a member of a group of companies of which a listed company is a member; and

(c)

a company limited by guarantee.

(2)

A body corporate must not be appointed a director of the company.

(3)

An appointment made in contravention of subsection (2) is void.

(4)

Nothing in this section affects any liability of a body corporate under any provision of this Ordinance or the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) if it—

(a)

purports to act as a director; or

(b)

acts as a shadow director,

although it could not, by virtue of this section, be appointed as a director.

commented Oct 29, 2018 by Kangkewen (10k points)

Kangkewen · Answer 12 · 2018-11-28T03:48:34+0000

Point 13: Company Ordinance resource provided by CR and other bodies: Table of Origin / Table of Destination (from Companies Ordinance (Cap. 32) to new Companies Ordinance) / Highlights

Table of Origin: https://www.cr.gov.hk/tc/companies_ordinance/docs/reference-table_01-e.pdf

Table of Destination (from Companies Ordinance (Cap. 32) to new Companies Ordinance): https://www.cr.gov.hk/tc/companies_ordinance/docs/reference-table_02-e.pdf

Highlights: https://www.cr.gov.hk/tc/companies_ordinance/docs/NewCO_C622_HL_FullVersion-c.pdf (Chinese version)

https://www.cr.gov.hk/en/companies_ordinance/docs/NewCO_C622_HL_FullVersion-e.pdf (English version)

Highlights of CR Prosecution Cases: https://www.cr.gov.hk/en/compliance/prosecution.htm

Introduction to New Company Ordinance by Zhong Hui: http://www.zhcpa.hk/pdf/CO_Mar2014.pdf

Introduction to New Company Ordinance by CR: https://www.cr.gov.hk/en/publications/docs/speech20140423_1-e.pdf

Highlights of Prosecution Cases by CR: https://www.cr.gov.hk/en/compliance/prosecution.htm

Kangkewen · Answer 13 · 2018-12-21T03:01:05+0000

Point 14: Registration of Non-Hong Kong Company in Hong Kong CR (need to register within one month of the establishment of a place of business in Hong Kong)

Under section 333 of the Companies Ordinance, an oversea company is required to register within one month of the establishment of a place of business in Hong Kong and deliver the following documents to the Registrar of Companies.

We need following information and documents to proceed the registration:

(a) a certified copy of the instrument issued by the local government defining the company’s constitution, such as business name, incorporation date, and etc;

(b) fill in CR's NN1 form stating the address of the principal place of business(), particulars of directors, secretary and authorized representative(#) in Hong Kong, etc.;
() place of business: includes a share transfer office and a share registration office

(#) Authorized representative can be:
(#1) a person resident in Hong Kong; or
(#2) a firm of solicitors or professional accountants having a place of business in Hong Kong; or
(#3) a solicitor corporation having a place of business in Hong Kong; or
(#4) a corporate practice within the meaning of section 2 of the Professional Accountants Ordinance (Cap. 50).

(c ) fill in BR's IRBR2 form;

(d) a certified copy of the company’s Certificate of Incorporation (or its equivalent); and

(e) a certified copy of the company’s latest accounts

CR's reference: http://www.cr.gov.hk/en/companies_ordinance/docs/part16-e.pdf

Kangkewen · Answer 14 · 2018-12-24T02:04:32+0000

Point 15: matters need to be approved by special resolution and file to CR, other than a special resolution to change the name of a company passed under section 107or 770 (keyword highlighted by 　　, the list may not be exhaustive, special resolution need to file to CR within 15 days)

Section 5 of Company Ordinance - Dormant company
- (1) If a qualified private company passes a special resolution specified in subsection (2), and the resolution is delivered to the Registrar for registration, the company is a dormant company for the purposes of Parts 9, 10 and 12 as from the date mentioned in subsection (2)(a) as declared by the resolution.
- (2) The special resolution specified for the purposes of subsection (1) is one—
Section 88 Alteration by special resolution or ordinary resolution / Subdivision 4 - Alteration of Articles (relevant CR form: NAA1)
- (1) Subject to this Ordinance, this section applies to the alteration of a company’s articles.
  (2) Subject to subsection (3) and any other provisions of this Ordinance, a company may only alter its articles by special resolution.
Section 89- Alteration of company’s objects (relevant CR form: NAA2)
- (2) The company may, by special resolution of which notice has been given to all the members of the company (including members who are not entitled to such notice under the company’s articles), alter the objects by—
Section 90- Alteration of certain articles by existing company (relevant CR form: NAA3)
- (3) An existing company may by special resolution alter any provision mentioned in subsection (1).
Section 107 - Company may change name by special resolution (relevant CR form: NN C2)
- (1) A company may change a company name by special resolution.
Section 130 - Unlimited company may apply for re-registration as company limited by shares (relevant CR form: NU1)
- (1) —
  (a) passes a special resolution specified in subsection (2); and
Section 180 Varying class rights (relevant CR form: NSC15)
- (3) The consent required for the purposes of this section is—
  (a) written consent of holders representing at least 75% of the total voting rights of holders of shares in the class; or
  (b) a special resolution passed at a separate general meeting of holders of shares in the class sanctioning the variation.
Section 211 Procedure for a company to reduce its share capital (relevant CR form: NSC18 NSC19 NSC20)
- The procedure for a company to reduce its share capital under this Division is—
  (a) by special resolution supported by a solvency statement under Subdivision 2; or
  (b) by special resolution confirmed by the Court under Subdivision 3.
Section 238 Share buy-back under general offer / Subdivision 4 - Share Buy-backs: Listed Companies
- (3) —
  (b) the resolution authorizing the offer must be a special resolution on which no non-tendering member votes.
Section 240 Share buy-back otherwise than under section 238 or 239
- (1) A listed company may buy back its own shares otherwise than under section 238 or 239 if the contract for buy-back of the shares is authorized in advance by special resolution.

(Continued by comment)

Kangkewen · Answer 15 · 2018-12-31T10:03:36+0000

Point 16: how can I get a Certificate of Incumbency for a Hong Kong company?

Hong Kong CR doesn't issue Certificate of Incumbency. But you can get a Certificate of Continuing Registration from CR.

Hereby bulletin by CR:

https://www.cr.gov.hk/en/publications/docs/29-e.pdf

Kangkewen · Answer 16 · 2019-05-10T03:39:55+0000

Point 17: resources for setting up a charitable bodies

Resource 1: [list of charitable institutions and trusts of a public character by IRD]

by using the list, can find out the name of charitable bodies recently permitted by IRD. Then go to CR and download their Article to study the clauses that permitted by IRD;
[backup link] if above link doesn't work.

Resource 2: [Charitable Organisations - latest development in the IRD's view and practice]

Resource 3: [guidance provided by IRD]

Key extract:

WHAT IS A CHARITY?

1. Charity is not equivalent to "voluntary" or "non-profit-making" organisation

Not all "Voluntary" or so-called "non-profit-making" organisations are charities, however worthy their causes may be. In fact, there is no provision in the Inland Revenue Ordinance which exempts a "voluntary" or "non-profit-making" organisation from tax.

2. Charity must be established exclusively for charitable purposes

Generally speaking, for an institution or a trust to be a charity, it must be established for purposes which are exclusively charitable according to law. The law defining the legal attributes of a charity is based upon case law developed through court decisions.

3. Charitable purposes are classified into four heads

For practical purposes, the judgement of Lord MacNaghten in the case of I T Special Commissioners v Pemsel (3 TC 53) is regarded as an authoritative summary of the purposes that may be accepted as charitable. These are: -

a. relief of poverty;
b. advancement of education;
c. advancement of religion; and
d. other purposes of a charitable nature beneficial to the community not falling under any of the preceding heads.

While the purposes under the first three heads may be in relation to activities carried on in any part of the world, those under head (d) will only be regarded as charitable if they are of benefit to the Hong Kong community.

4. Charity must be established for public benefit

A purpose is not charitable unless it is directed to the public or a sufficient section of it. An institution cannot generally be charitable if it is in principle established for the benefit of specific individuals. It is, however, not possible to lay down any precise definition of what constitutes a sufficient section of the public. Each case must be considered on its own merit.

5. EXAMPLES OF PURPOSES WHICH THE COURT HAD HELD TO BE CHARITABLE PURPOSES

a. Relief of poor people;
b. Relief of victims of a particular disaster;
c. Relief of sickness;
d. Relief of physically and mentally disabled;
e. Establishment or maintenance of non-profit-making schools;
f. Provision of scholarships;
g. Diffusion of knowledge of particular academic subjects;
h. Establishment or maintenance of a church;
i. Establishment of religious institutions of a public character;
j. Prevention of cruelty to animals;
k. Protection and safeguarding of the environment or countryside.

EXAMPLES OF PURPOSES WHICH THE COURTS HAD HELD TO BE NON-CHARITABLE PURPOSES

a. Attainment of a political object;
b. Promotion of the benefits of the founders or subscribers;
c. Provision of a playing field, recreation ground or scholarship fund for employees of a particular company or industry;
d. Encouragement of a particular sport such as angling or cricket.

Relevant Inland Revenue Ordinance (Cap. 112) clauses (extra only):

Section: 88

Heading: Exemption of charitable bodies

Notwithstanding anything to the contrary in this Ordinance contained there shall be exempt and there shall be deemed always to have been exempt from tax any charitable institution or trust of a public character:

Provided that where a trade or business is carried on by any such institution or trust the profits derived from such trade or business shall be exempt and shall be deemed to have been exempt from tax only if such profits are applied solely for charitable purposes and are not expended substantially outside Hong Kong and either—

(Amended 7 of 1986 s. 12)

(a) the trade or business is exercised in the course of the actual carrying out of the expressed objects of such institution or trust; or
(b) the work in connection with the trade or business is mainly carried on by persons for whose benefit such institution or trust is established.

(Added 3 of 1949 s. 18. Amended 30 of 1950 Schedule; 49 of 1956 s. 66; 26 of 1969 s. 40; 65 of 1970 s. 10)

Kangkewen · Answer 17 · 2019-05-20T10:03:53+0000

Point 18: Consequence for Share Capital in high amount and suggestion to client for its reduction

If the company issues high amount of shares, the shareholders may not need to deposit this money into the company's bank accounts.

However, if this amount is not deposited by the shareholder, it would be money owed from the shareholder to the company on the financial statements.

Consequently the auditor may need to issue qualified opinion on the recoverability of the amounts due from the shareholder.

If in case the company is wounding up, the liquidator will sue the shareholder to recover the amounts due from the shareholder.

For Profit Tax, when the company has un-paid tax to IRD and IRD want to recover the tax from the company, IRD may use the amounts due from shareholder to shift the company's tax liability to the shareholder. IRD can frozen shareholder's personal bank accounts to recover the tax. IRD may also can appoint Official Receiver similar as liquidator to collect money from the company's debtors.

For Stamp Duty, when transfer shares, will suffering a risk that the Stamp Duty will calculated based on share capital amounts rather than net assets amount of the company.

For reduction of share capital, better suggest the client to find a solicitor.

Kangkewen · Answer 18 · 2019-05-26T05:44:24+0000

Point 19: using CR's electric search services to find out a natural person being which companies' director

Step 1: Choose following function in CR's electric search services:

Step 2: click into Directors Index Search (Director-based) and input on name-based (either English name or Chinese name) or HKID-based, then the search can be done.

For sole proprietorship and partnership with Business Registration issued by IRD, don't have similar search on natural person as maybe not allowed under IRO's confidentiality requirements (See topic "Expanded discussion on confidentiality" answer 4 for IRO's confidentiality clause).

Expanded discussion: searching the natural person being which listing companies' director

Link: https://www.hkexnews.hk/reports/dirsearch?sc_lang=en

Kangkewen · Answer 19 · 2019-06-15T06:54:09+0000

Point 20: where to see if members of a company have priority right to acquired other members' shares when the shares are going to sell?

Answer: look at the article of the company. The standard company article provided by CR doesn't include a clause to give member priority to acquire out-going member's shares.

Section 160 of Company Ordinance (Cap. 622):

Title: Pre-emption rights in relation to transmission by law

(1) This section applies if a company’s articles give a member or class of members of the company a right of pre-emption or right to purchase shares in the company on the occurrence of an event that constitutes a transmission of the right to the shares by operation of law.
(2) If this section applies, the registration as a member of the company of the person to whom the right to the shares is transmitted is subject to the right of pre-emption or right to purchase shares contained in the articles and that right may be enforced against the person.

Kangkewen · Answer 20 · 2019-07-01T09:39:13+0000

Point 21: can I recover my ordered documents from CR's Cyber Search Center if I already loss my paid order's Order Number and Order Enquiry Reference Number?

Answer: Yes. Use the function at following screen:

Also see following Q&A at CR's website: https://www.cr.gov.hk/en/faq/eservice/company-search/csc.htm

In answer to question 8:

Note: Registered Online Users can select the "Order Enquiry" function under "My Account" on the menu bar. For Unregistered Online Users, the function is under "Shopping" on the menu bar. In addition, Unregistered Online Users can use "My Transactions" function under "Shopping" to view order information, including the Order Number and Order Enquiry Reference Number, of the most recent 20 orders placed via the same computer / same mobile device within the past 72 hours.

Kangkewen · Answer 21 · 2019-07-13T05:03:50+0000

Point 22: what's apostille and how to handle it?

Apostille is kind of certified documents under 海牙公約，亦稱「海牙法規」（法語：Convention de La Haye）. apostille only can be done by High Court at High Court Building, 38 Queensway, Hong Kong.

For HK company's com sec documents, can order Certified Copies from CR and then visit High Court to make its apostille.

High Court's web for apostille: https://www.judiciary.hk/en/court_services_facilities/apostille.html

Only 2 kinds of documents accepted by high court for Apostille:

A. Public documents bearing the true signature of an official party such as a Hong Kong SAR Government recognized officer.
B. Documents signed by a notary public or a Commissioner for Oaths in Hong Kong.

Sample for apostille:

A sample for completed CR files' APOSTILLE:

Kangkewen · Answer 22 · 2019-09-17T09:28:47+0000

Point 23: what if all directors of a company have resigned?

The ex-directors deem to be going on to be the company's directors, and responsible to all directors' duty.

Kangkewen · Answer 23 · 2019-09-19T01:10:09+0000

Point 24: The three basic rules of interpretation of Company Ordinance

Judges have traditionally recognised three different rules of statutory interpretation: the mischief rule, the literal rule and the golden rule. [22] Recent developments see a fusion of the several traditional rules, bringing about the interpretation of both the letter and the spirit of the law, i.e. the statutory context and the object of the legislation are to be considered altogether so that anomalous decisions will be avoided.

[22] See generally Glanville Williams, Learning the Law (London : Stevens 11th edn) and Wesley-Smith (note 18 above).

The Mischief Rule refers to the legal position before the statute was passed and the mischief that the statute was intended to cure. The statute is then construed in such a way as to suppress the mischief and to advance the remedy.

The Literal Rule applies words of a statute in their natural and ordinary sense with nothing added and nothing taken away, even if an inexpedient, unjust or immoral outcome occurs, i.e. the court can neither extend the statute to a casus omissus [an omitted case which should have been, but has not been, provided for in the statute] nor curtail it by leaving out a casus male inclusus [a case that the statute literally includes, though it should not have].

The Golden Rule so construes a statute as to avoid absurdity or anomalies by adopting a secondary (or less usual) meaning which is also linguistically possible in order to produce a reasonable result. Sometimes, a judge may read in words which he considers to be necessarily implied by words already in the statute. He may even, to a limited extent, alter or ignore statutory words for reconciling an unintelligible provision with the rest of the text (for example, judges have occasionally corrected an "and" in a statute when it meant "or").

1st, The Literal Rule -

Literal rule of interpretation is the primary rule. Under this rule of interpretation the Courts interpret the statutes in a literal and ordinary sense. They interpret the words of the statute in a way that is used commonly by all. It is incumbent on the court to use the grammatical meaning. The statutes should be construed in such a manner as though there is no other meaning except the literal meaning. [ref link]

2nd, The Golden Rule - Words should be construed in their grammatical and ordinary sense.

3rd, The Mischief Rule - look at the true intent of the legislation

Reference: https://www.elegislation.gov.hk/interpretbileg

Kangkewen · Answer 24 · 2019-10-21T14:15:35+0000

Point 25: restriction on share transfer for private company

Definition of Private company:

Section 11 of Company Ordinance (Cap. 622):

(1) For the purposes of this Ordinance, a company is a private company if—

(a) its articles—
- (i) restrict a member’s right to transfer shares;
- (ii) limit the number of members to 50; and
- (iii) prohibit any invitation to the public to subscribe for any shares or debentures of the company; and
(b) it is not a company limited by guarantee.

"restrict a member’s right to transfer shares" is necessary for any Private Company under Hong Kong Company Ordinance.

On CR standard article, the "restrict a member’s right to transfer shares" is reflecting on its following clause:

Article Part 2 (2): The directors may in their discretion refuse to register the transfer of a share

And

Article Division 4 - Transfer and Transmission of shares - 64. Power of directors to refuse transfer of shares [Details skip]

Kangkewen · Answer 25 · 2019-10-22T09:09:52+0000

Point 26: specified charge need to be registered

Company Ordinance (Cap. 622) doesn't directly define what's charge. Based on the three basic rules of interpretation of Company Ordinance as in Point 24, may apply the literal meaning of the word "charge" as definition of charge in Company Ordinance.

Charge creates an obstruction on the title of a property when there is a charge on the asset, the asset cannot be sold or transferred.

(Picture source: https://keydifferences.com/difference-between-mortgage-and-charge.html)

charge (押記) includes mortgage [Section 333 of Company Ordinance (Cap. 622)].

A company's bank time deposit is used to pledged another's company's bank credit line -> need to registered.

A company's bank loan / bank credit line is pledged by a related party's property -> need to registered.

List of specified charge (need to be registered)

Section 334 specified charge of Company Ordinance

(1) In this Division, a reference to a specified charge is a reference to any of the following charges created on or after the commencement date# of this section—

(a) a charge on uncalled share capital of the company;
(b) a charge created or evidenced by an instrument that, if executed by a natural person, would require registration as a bill of sale;
(c) a charge on land (wherever situate) or any interest in land, except a charge for any rent or other periodical sum issuing out of land;
(d) a charge on book debts of the company;
(e) a charge on calls made but not paid;
(f) a charge on instalments due, but not paid, on the issue price of shares;
(g) a charge on a ship or any share in a ship;
(h) a charge on an aircraft or any share in an aircraft;
(i) a charge on—
- (i) goodwill;
- (ii) a patent or a licence under a patent;
- (iii) a trademark; or
- (iv) a copyright or a licence under a copyright;
(j) a floating charge on the company’s undertaking or property.

(2) further clarify subsection (1)(c), for debentures over interest on land];

(3) further clarify subsection (1)(d), for deposit of money as security];

(4) further clarify subsection (1)(d) and (j), for ship].

Kangkewen · Answer 26 · 2019-10-22T12:17:16+0000

Point 27: Any alternative to fill in cell 8 mortgages and charges of NAR1 if didn't know the accurate charge amounts

Can fill in "All Moneys" if the mortgage is kind of "All Moneys" and in case you can't get the accurate outstanding balance but this is not a good practice and non-verified method.

"All Moneys" mean the amount of mortgage can be changed due to refinancing and do not need to re sign the loan agreement.

If the mortgage is kind of "All Moneys", on land search, it will show as following:

Kangkewen · Answer 27 · 2019-12-12T03:45:34+0000

Point 28: basic rules for auditors acting as company secretary

Reference: Section 923 of COE (November 2018)

Other practical hints: com sec and audit should have a clear cut of duties, like:

different staff;
com sec files, tax files should be separate against audit files / different filing system;
etc.

[Company Secretary] practical useful miscellaneous sundry points [Summary]

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Q13: What will be the consequences if a company fails to comply with the change of name direction issued by the Registrar of Companies?