Hong Kong Company Articles of Association – Companies Set Up in Hong Kong Need to Comply With the New Companies Ordinance
Whenever a business sets up a company in Hong Kong, the registration process requires the company to have Memorandum of Association and Company Articles of Association. This was under the old Company Ordinance. Under the New Ordinance, the government of Hong Kong has abolished the Memorandum of Association. They have retained the Company Articles of Association as the primary document for companies incorporated in Hong Kong.
New Ordinance, New Rules
The new Company Ordinance (CO) of Hong Kong aims to enhance corporate governance, establish better regulations, promote business and update the law governing it. The old Memorandum of Association is abolished because it contains two information that is no longer relevant in the current corporate capacity. Hence, there is no urgent need for existing companies to change their information. Existing companies should only update and incorporate relevant information in their articles of association.
Manual for a Company
The Articles of Association (AA) is an essential document for a company. A company’s article of association resembles a user-manual for the public. An AA states what the company is about, its functions, how it pays dividends and audit financial records, whether it issues shares or not and power of voting rights. Anyone registering a business in Hong Kong is required to choose a company type and company name. It is advisable to refer to a guideline for Hong Kong company name registration available here to ensure your application is not rejected. Once done, a business person needs to submit an incorporation form, a copy of the company’s articles of association and a notice to the business registration office. A company’s articles of association must have the following:
- Company name
- Members liability:-
- A limited company must state members liability is limited.
- An unlimited company to indicate members liability is unlimited.
- A company limited by shares must describe members liability is limited to any amount unpaid on shares held by members.
- A company limited by guarantee must describe that each member of the company will contribute an amount required to the company when the company winds up.
- A company with a share capital must set forth the capital and initial shareholdings.
- For a company with a licence, it must describe the company’s objects while the license is in force.
Ease of Business
Hong Kong is known for its facilitation of business environment. More so, it improves business registration processes so that business owners can start their business the soonest possible. Hence, the Hong Kong government has prepared model articles for companies wishing to adopt and amend where necessary according to their company types. As long as the provisions are sufficient for the company, the model articles are appropriate to certain kinds of company. Foreign business owners can contact local professional firms for advice or appoint them to set up a company on your behalf.