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Conclusions on 2nd public consultation on Companies Ordinance rewrite
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     The Government today (December 10) released the second public consultation conclusions on the Companies Ordinance rewrite covering company names, directors' duties, corporate directorship and registration of charges.

     The three-month consultation was completed in June and 61 submissions were received.

     The respondents' views were considered by the Administration in consultation with the Standing Committee on Company Law Reform (SCCLR).

     A spokesman for the Financial Services and the Treasury Bureau said, "After careful consideration of all the public feedback, the following key recommendations, amongst the others, will be adopted:

(1) Company names

* The Registrar of Companies should be empowered to act upon a court order directing a defendant company to change its infringing name, and substitute its infringing name with its registration number if the company fails to comply with the Registrar¡¦s direction to do so;

* "Hybrid names" (except those with phrases like "X¥ú" and "¥d©ÔOK") will continue to be disallowed;

(2) Directors' duties

* The directors' duty of care, skill and diligence should be codified so as to clarify the law in this respect. The fiduciary duties of directors should remain uncodified;

(3) Corporate directorship

* Corporate directorship will continue to be allowed in private companies.  However, every company must have at least one director who is an individual, subject to a grace period;

(4) Registration of charges

* Some technical amendments, including requiring the instrument of charge to be registered together with some simple particulars, will be made to the relevant provisions."

     "We would like to thank the respondents for their valuable comments," the spokesman said.

     "The final recommendations will be incorporated into the Companies Bill to be issued in the form of a Draft Bill for further public consultation around mid-2009.  We aim to introduce the CB into the Legislative Council by the third quarter of 2010."

     The consultation conclusions on this second consultation and the compendium of the submissions are available at the "CO Rewrite" website (www.fstb.gov.hk/fsb/co_rewrite) and the Companies Registry¡¦s website (http://www.cr.gov.hk/).

Ends/Wednesday, December 10, 2008
Issued at HKT 16:30

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