*********************************************************
The second consultation on the Companies Ordinance rewrite, covering measures to improve provisions on company names, directors' duties, corporate directorship and registration of charges, was announced by the Government today (April 2).
This three-month consultation is the second of a series of consultations in the course of the Companies Ordinance rewrite exercise.
The Government would like to consult on the following proposals:
(1) Company names
To consider empowering the Registrar of Companies to act on a court order to direct a defendant company to change its infringing name and substitute the non-compliant defendant company's name with its registration number to tackle possible abuse of the company name registration regime by "shadow companies".
(2) Directors' duties
To consider whether the directors' general duties - which are mainly found in the case law - should be codified to make them more accessible to the public, and if so, whether the United Kingdom (UK)'s approach, which imposes a duty on directors to promote the success of the company having regard to a wider list of factors, such as the interests of employees, and the impact of the company's operations on the community and the environment, should be followed.
(3) Corporate directorship
To consider abolishing corporate directorship altogether, subject to a reasonable grace period, or following the UK approach which requires that every company must have at least one individual person as a director, for the purpose of improving the accountability and transparency of company operations and the enforceability of directors' obligations.
(4) Registration of charges
To update the list of registrable charges, improve the procedure for registration of charges by making the instrument of charge available in full on the public register, and shorten the registration period from five weeks to 21 days to reduce the period whereby the charge is "invisible" to third parties. The Government also invites initial views on whether there is any need to introduce an administrative mechanism for late registration of charges to replace the current system of applying to the court.
A government spokesman said, "We would like to thank the Standing Committee on Company Law Reform (SCCLR) and relevant advisory groups comprising representatives from relevant professional and business organisations, academics and members of the SCCLR for their invaluable advice and recommendations offered on the proposals."
"We look forward to views from all interested parties and stakeholders on the proposals," the spokesman said.
The rewrite exercise, which began in mid-2006, aims to modernise company law and enhance Hong Kong's competitiveness and attractiveness as an international business and financial centre.
The first consultation on accounting and auditing provisions in the Companies Ordinance was conducted in 2007 and the conclusions are available on www.fstb.gov.hk/fsb/co_rewrite.
"Another consultation on subjects such as share capital, capital maintenance rules and statutory amalgamation procedures will be conducted in mid-2008," the spokesman said.
The views collected from the consultations will be considered for incorporation into a White Bill to be issued for public consultation in mid-2009. The new Companies Bill is tentatively scheduled to be introduced into the Legislative Council in the third quarter of 2010.
The consultation document on this second consultation can be downloaded from www.fstb.gov.hk/fsb. Comments and submissions should be sent by mail to the Companies Bill Team, Financial Services and the Treasury Bureau, 15/F, Queensway Government Offices, 66 Queensway, Hong Kong, or by fax to (852) 2869-4195, or by email to co_rewrite@fstb.gov.hk on or before June 30, 2008.
Ends/Wednesday, April 2, 2008
Issued at HKT 17:16
NNNN
