Companies ordinance, 1984 v reduction of share capital 96. Revamping share capital restructure under the new companies ordinance the new companies ordinance the new co comes into effect on 3 march 2014. Major changes relating to shares capital under the new. Accounting for share capit al share and share capital. 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. Effective date new co will come into operation on 3. Hong kong preparing for the new companies ordinance. 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. Resolving shareholders disputes under the new companies. Companies limited by guarantee, whether private or nonprivate, are categorized as a separate type of companies. The first quarter of 2014 heralds a new era for hong kongs company law with the commencement of the new companies ordinance cap. In accordance with hong kong new companies ordinance there is no minimum issued share capital required for a hong kong limited liability company. Structure of the new companies ordinance divided into 21 parts, comprising 921 sections and 11 schedules 12 subordinate legislation.
This change is brought about by the new hong kong companies ordinance cap. Hong kong new companies ordinance hong kong business kaizen. Sebi companies share capital and debentures rules, 2014. The new ordinance aims to achieve four main objectives, namely, enhancing corporate governance, facilitating business, ensuring better regulation and modernising hong kongs company law. Financial reporting under the new companies ordinance. Finance act, 2014 a member firm of the pwc network a.
The new companies ordinance cap 622 co will come into operation probably in the first quarter of 2014. Near apple, lemon, 2, false means to find documents having apple within 2 words apart from lemon. Also affected will be share premium, capital redemption reserve and the requirement for authorised capital. 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. New companies ordinance share capital the new co adopts a mandatory system of nopar for all hong kong companies with a share capital and abolishes the concept of par or nominal value of shares. The new regime has become effective upon commencement of the new ordinance on 3 march 2014. Acc hong kong the new companies ordinance share capital. 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.
The companies share capital and debentures amendment rules, 2014 dated 18th june. These changes also apply to shares issued before the start of the new ordinance. Key changes under the 2014 hong kong companies ordinance. The classic shareholders dispute time and again we see disputes arising among the shareholders.
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. An ordinance to reform and modernize hong kong company law. The new co is a revamp of the hong kong company law regime base. The new ordinance aims to achieve four main objectives, namely, enhancing corporate governance, facilitating business, ensuring better regulation and modernising. Full proceeds of any share issue after 3 march 2014 will be credited directly to the companys share capital, rather than being allocated between. 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. This month the companies registry concludes its series of articles introducing the major changes brought in by the new companies ordinance. This alert, being the first of a series of updates on. Apr 09, 2014 the new companies ordinance new companies ordinance will take effect on 3 march 2014. 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. All hong kong incorporated companies new provisions.
Here is some information about the most important changes. Effective date new co will come into operation on 3 march 2014. 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. 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. Highlights of companies amendment ordinance, 2018 the companies amendment ordinance, 2018 promulgated on november 02, 2018 thereby amending some of the sections of. Hkfrs illustrative annual financial statements 2014. Par value was abolished with effect from 3rd march 2014 under the new companies ordinance cap 622. A company usually raises its capital in the form of shares called share capital and debentures debt capital. 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.
Tong, chartered company secretary, barrister at law, author of the pbe paper iv study text introduction the new companies ordinance co cap. The new swedish companies act comes into force as from 1 january 2006. There is no conversion process necessary for existing companies. This new legislation aims at modernizing the law and is drafted in plain english.
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. Major changes relating to share capital under the new hong. Hk companies ordinance series 4 reduction of capital. If a company issues new shares for consideration, then the full proceeds will be credited to the share capital account. From 3 march 2014, all shares, whether issued before or after that date, will lose their nominal also known as par value. This article examines the major changes in the company law as related to the aat examination paper 6 fundamentals of business law. Major changes under the new companies ordinance, s chapter. The stated objectives of the changes are to enhance corporate governance, ensure better regulation, facilitate business law and modernize the law. The new co states that the amount of authorized capital set out in an existing. The new companies ordinance highlights of some major. Rm 2401,world trade bldg, 500 guangdong rd, huangpu district, shanghai, china. This applies to both existing and new companies incorporated in hong kong.
Subsequently, various amendments were proposed by the finance minister and. Jonathan mok partner, mayer brown jsm loretta chan consultant, mayer brown jsm date. While most of the provisions in relation to company formation, administration and operation have been repealed, the windingup and insolvencyrelated provisions have been. This is a significant milestone for the development of company law in hong kong.
This chapter deals with the accounting for share capital of companies. 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. Full new companies ordinance chapter 622 companies registry. 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 act is contained in the swedish code of statutes, sfs 2005. This alert, being the first of a series of updates on the new companies ordinance, covers major changes in. Capital reduction under the new companies ordinance. 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. Besides, the new hong kong companies ordinance cap. The new companies ordinance new co is a comprehensive rewrite of the predecessor companies ordinance cap. Share capital restructuring for companies in hong kongpdf264kb.
The new hong kong companies ordinance an overview 0805. The new ordinance was published in the government gazette in august 2012. This ordinance repealed the existing companies ordinance, 1984 1984 ordinance. The highlights on each part of the new companies ordinance the new ordinance contained. Companies ordinance cap 622 part 1 relevant to aat.
New hong kong companies ordinance march 2014 page 2. The new companies ordinance the new co comes into effect on 3 march 2014. 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. The essential corporate law in hong kong ilp abogados. The new co is primarily applicable to companies incorporated in hong kong, and all the provisions of the new co are immediately effective from 3 march 2014, except mainly for. We now have the new concept of company capital, which is. This issue forms the first of a series of newsletters on the new co. Nature and types a company is an artificial person created by law, having separate entity with a perpetual succession and a common seal. New companies ordinance share capital charltons law. 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. The new companies ordinance an overview ms ada chung registrar of companies 8. Companies ordinance gazette number version date long title.
Apple is good means to find documents having the exact phrase apple is good. Capital reduction under the new companies ordinance business. 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. The new companies ordinance share capital and reorganisation. The new companies ordinance new companies ordinance will take effect on 3 march 2014. New requirements for shareholders approval before carrying out capital transactions. 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. Revamping share capital restructure under the new companies. 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. 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. Capital reduction under the new companies ordinance relevant to pbe paper iv business law and taxation edward b. Mayer brown jsm, 18f princes building, 10 chater road, central, hong kong.
Monthly return of equity issuer on movements in securities. Hong kong new companies ordinance hong kong business. Revamping share capital restructure under the new companies ordinance. All companies subject to filing requirements under the new co overview under the new co, a new set of specified forms is introduced for. On 3 march 2014, hong kongs new companies ordinance new co and its subsidiary legislation became effective 1. Finance act, 2014 the finance bill, 2014 was presented in national assembly on june 3, 2014.
Objection by creditors and settlement of list of objecting creditors 75 100. 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. Major changes under the new companies ordinance, s. The new hong kong companies ordinance major changes relating to share capital mr tim chung senior solicitor 23. The current companies ordinance came into force in march 2014. The new companies ordinance from a cpas perspective pdf version 3 march 2014. The new companies ordinance came into effect on 3 march 2014. The new companies ordinance the new ordinance, which consists of 21 parts, 921 sections and 11 schedules is, i believe, one of the. On 3 march 2014, an entirely new hong kong companies ordinance cap.
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