Hong Kong Company Law/ Company Law/Hong Kong Companies Registry
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Hong Kong company law –Introduction
What is company law? It is the law in relation to the governance of companies in the context of company incorporation, directors and shareholders. Company law is governed by the 'Companies Ordinance' Cap 32 in Hong Kong. A company is a legal entity that is separate from its owners or shareholders and is formed by filing certificates or articles to the Company Registry. Companies are governed by shareholders, who elect directors, who elect officers to run the company.
Hong Kong company Law—Hong Kong Companies Registry
For individuals wishing to set up a business in Hong Kong they must first choose a company name in order to differentiate themselves from other registered companies. However, as simple as this may sound, there are restrictions on what company name you can use. For example a company cannot register a name that already appears in the Registrar's index of company names or the same as that of a body corporate incorporated under the Ordinance. The name is also subject to other certain restrictions, it can not use a company name that, in the opinion of the Chief Executive, would constitute a criminal offence or think it is offensive or contrary to public interest.
If a company registers a name which included a registered trade mark of another business, it would be open to an action for infringement of such trademark. It is therefore good practice to request your solicitor to inspect the trade marks register before applying for registration.
When incorporating a company, a 'memorandum of association' must be created. Its historical principal function was to set out its reason for existence and to regulate its dealing with outsiders. A memorandum of association contains the name of the company; the registered office; the objects of the company (i.e. what its purpose is set out to do); the liability of the members (i.e. whether it is a limited company) and also the authorised share capital of the company.
Hong Kong company law-- incorporate a company
Pursuant to the Companies Ordinance, a Hong Kong company must be issued with a least one director, one secretary and at least one shareholder. Most companies will be created with share capital. In turn, those companies must be created with shareholders, although as previously mentioned, it is possible to open up a company with only one shareholder. A company's share capital must have nominal, financial value attributed to them. The relevant shareholder will normally agree to pay the company an amount at least equivalent to the nominal value of the shares subscribed for.
A company must have an 'articles of association'. This represents the main constitutional document of a company and regulates the company's internal affairs. The articles contain provisions that relate to directors' powers, proceedings at members' meetings, conduct at board meetings etc.
The Companies Registry will examine documents that have been submitted in application to incorporate a company. On approval of the name and documents, a certificate of incorporation will then be issued to show that the company has been incorporated on a particular date. This is known as the 'certificate of incorporation'. From this date onwards, the company then becomes a legal entity for all intents and purposes.
After incorporating a company, board meetings should be conducted so that the approval of any service (employment) contracts, the allotment of shares over and above those allocated in the memorandum can be discussed. Auditors should also be appointed to the company, along with bankers.
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