The New Companies Ordinance Series (2) – Written Resolutions, General Meetings, Record Keeping, Accounting Reference Period and Prohibition of Bearer Warrants

In this issue of the New Companies Ordinance Series, we will discuss major changes in relation to written resolutions of members, general meetings, record keeping, accounting reference period and prohibition of bearer warrants.

(1) New Rules for passing Written Resolutions

Under the existing law, any matter which may be done by a company by resolution in general meeting (save for removal of auditors or directors in certain circumstances) may be done by a written resolution signed by all members of a company who would be entitled to attend and vote at the meeting. The existing law however does not provide for statutory procedures for passing a written resolution.

In the New Companies Ordinance, the directors or any member of a company may propose a written resolution. The company has a duty to circulate such resolution proposed by the directors or upon request by members holding no less than 5% voting rights (or a lower percentage specified in the company's articles) to all members. The company is obliged to circulate such proposed written resolution within 21 days.

A member who requests the company to circulate a resolution may also request the company to circulate with the resolution a statement of not more than 1,000 words on the subject matter of the resolution.

A written resolution is passed when all eligible members have signified their agreement to it. A proposed written resolution lapses if it is not passed within 28 days or the period specified in the company's articles.

These procedural requirements regarding written resolutions may be contracted out in the company's articles provided that such written resolutions will be passed by the members who are entitled to vote on the resolutions unanimously.

(2) Dispensation with the holding of annual general meetings ("AGM")

Under the existing law, a company must hold AGMs unless written resolutions have been passed to deal with relevant matters and the documents required to be laid before the meeting have been provided to the members or the company is dormant.

The New Companies Ordinance provides for further grounds for dispensation with AGMs. These additional grounds are :-

1. where the company has only one member; or
2. where all members pass a resolution to dispense with the holding of the AGM and such resolution has not been revoked and no member has required the holding of the AGM.

Notwithstanding the aforesaid relaxation of requirements, companies are still required to prepare financial statements, directors' report and auditor's report for each financial year and circulate the same to every shareholder within the statutory prescribed period.

(3) Notice of General Meetings

Under the new law, the notice period for calling a general meeting of a limited company is generally 14 clear days (regardless of whether ordinary or special resolution will be passed at the meeting), save for the calling of AGM (where notice of at least 21 clear days should be given) and for the passing of resolutions requiring special notice under the New Companies Ordinance.

(4)Proceedings at general meetings

Under the New Companies Ordinance:-

1. general meetings may now be held at two or more places by using technology which enables members to listen, speak and vote at the meeting. This modernizes the law and facilitates the decision-making process of companies.
2. Five members with voting rights, or members with voting rights of no less than 5% (instead of 10% under the existing law) may demand a poll.
3. there are a number of provisions dealing with proxies and corporate representatives. The rights and obligations of proxies have been clarified. Under existing law, a proxy is not entitled to vote on a show of hands unless the articles specify otherwise. This restriction is removed in the New Companies Ordinance. Subject to any provision of the company's articles to the contrary, a proxy may vote on a show of hands except in the case of multiple proxies (i.e. a member appoints more than one proxy). In addition, a proxy may now be appointed as chairman of a meeting. A proxy may also demand a poll.

The new regime provides a higher degree of certainty in voting by proxy. This should incentivize voting by proxy in general.

(5) Company Record Keeping and Inspection

To enhance corporate governance, the new law provides a standardised regime for a company's record keeping (i.e keeping of any register, index, agreement, memorandum, minutes or other document required to be kept by a company, other than accounting records which are governed by other sections).

Under the new law, a company will only be required to keep records of resolutions and minutes of meetings of members, minutes of directors' meetings, written record of decision of sole director of private company and entries in the register of members for 10 years. At present, a company is required to keep entries relating to former members for 30 years. The existing law does not contain any express provision in relation to the time period for keeping records of resolutions and meetings.

The new law provides that a company may keep its company records at its registered office or a prescribed place which should be a place in Hong Kong in accordance with its subsidiary legislation (i.e. Company Records (Inspection and Provision of Copies) Regulation).

(6) Introduction of the concept "Accounting Reference Period"

Under the New Companies Ordinance, a company is required to prepare its financial statements for each financial year which will be determined by reference to its "Accounting Reference Period". The New Companies Ordinance contains detailed provisions which determine the "Accounting Reference Period" of existing companies and new companies formed under the New Companies Ordinance.

A company's first financial year after the commencement of the New Companies Ordinance begins on the first day of its first "Accounting Reference Period" and ends on the last day of that period. As certain new requirements shall apply to financial years of the company after the commencement of the New Companies Ordinance, it is important for all companies to identify their "Accounting Reference Period" to ensure compliance of the new law.

(7) Prohibition of bearer warrants
The existing Companies Ordinance allows a non-private company limited by shares to issue bearer warrants.

The New Companies Ordinance removes the power of all companies to issue bearer warrants.

Bearer warrants issued before the commencement of the new law would not be affected, but upon the surrender of such existing bearer warrants, the bearer's name will be registered in the register of members.

We will discuss other changes brought by the New Companies Ordinance in the next issue.

新《公司条例》系列（2）- 书面决议、股东大会、公司纪录备存、会计参照期及禁止发行不记名股份权证

本期的快讯将讨论新《公司条例》下有关股东书面决议、股东大会、公司纪录备存、会计参照期及禁止发行不记名股份权证的主要修订。

(1) 订立通过书面决议的新规则

在现行法例下，任何可藉股东大会通过的公司事务，可由公司全体有权出席会议并在会议上表决的股东签署的书面决议通过（不适用于在若干情况下免任核数师或董事），但现行法例并未有规定通过书面决议的法定程序。

于新法例下，公司的董事或任何股东均可提出采用书面决议的建议。公司有责任向所有股东传阅由董事提出的书面决议或应持有不少于百分之五（或于公司章程细则中指定的较低百分比）表决权的股东的要求向所有股东传阅书面决议。公司必须于21日内传阅被提出的的书面决议。

要求公司传阅书面决议的股东，可同时要求公司传阅一份不多于1,000字有关决议标的事宜的陈述。

在所有合资格的股东表示同意书面决议后，该决议即获通过。如被提出的书面决议未能于28日内或于公司章程细则指定的期限内通过，该决议即告失效。

公司的章程细则也可就此等有关书面决议程序的要求另行约定，前提是此等书面决议须经全体有权就此等决议表决的股东一致通过。

(2) 免除举行周年股东大会 （"周年大会"）

于现行法例下，除非有关事项已藉通过书面决议处理及须在会议中提呈的文件已提供予股东，或公司为不活动公司，否则公司必须召开周年大会。

新《公司条例》提供其他可免除召开周年大会的情况，包括：-

1. 公司只有一名股东；或
2. 所有股东通过决议免除召开周年大会，且有关决议没有被撤销及没有任何股东要求召开周年大会。

即使有关举行周年大会的要求获放宽，但公司仍需要就每个财政年度准备财务报表、董事报告及核数师报告，并将之于法定期限内向所有股东传阅。

(3) 股东大会通知

在新例下，有限公司召开股东大会的通知期一般为14日（不论会议将通过的决议是普通决议或是特别决议），惟召开周年大会（通知期至少为21日）及拟通过的决议为新《公司条例》规定需要特别通知的决议除外。

(4) 股东大会的程序

于新《公司条例》下：-

1. 股东大会可透过能让股东于会议上聆听、发言及表决的技术，于两个或以上的地方举行。此修订使《公司条例》切合现代需求并使公司的决策过程更便利。
2. 五名有表决权的股东，或持有不少于百分之五表决权（现行法例为百分之十表决权）的股东，可要求以投票方式表决。
3. 另有数项有关代表及法团代表的条文。代表的权利及义务亦获厘清。在现行法例下，除非章程细则另有规定，代表无权举手表决。新《公司条例》删除了此限制。除非公司章程有任何其他规定，代表将可参与举手表决（一名股东委托多于一名代表的情况除外）。另外，代表可获委任为大会主席，并可要求以投票方式表决。

新例提高了代表参与表决时的明确性，应会鼓励股东藉委任代表参与投票。

(5) 公司纪录备存及查阅

为加强企业管理，新法例规定了一套公司纪录备存的一致制度（适用于公司须备存的登记册、索引、协议、备忘录、会议纪录及其他文件，不包括受其他条文所管限的会计纪录）。

于新例下，公司备存股东决议纪录及会议纪录、董事会议纪录、私人公司唯一董事的决定的书面纪录，以及股东名册纪录的保存期为10年。现时，公司需要保留前任股东的记项达30年。现行法例并没有明确规定保存决议及会议纪录的时限。
新例规定公司可将公司纪录存放于其注册办事处或某指定地点。根据附例（即公司纪录（查阅及提供文本）规例），该指定地点为香港境内的任何地方。

(6) 引入「会计参照期」的概念

于新《公司条例》下，公司须就每个财政年度制订财务报表，而财政年度乃根据其「会计参照期」而定。新《公司条例》对现有公司及于新《公司条例》下成立的新公司的「会计参照期」作出详细规定。

一家公司于新《公司条例》生效后的首个财政年度将于其首个「会计参照期」的首日开始，并于该期间的最后一日终结。由于将有多项新规定适用于公司在新例生效后的财政年度，因此所有公司应辨别其「会计参照期」，以确保符合新法例的规定。

(7) 禁止发行不记名股份权证

现行的《公司条例》允许非私人股份有限公司发行不记名股份权证。
新《公司条例》剔除了所有公司发行不记名股份权证的权力。
于新例生效前发行的不记名股份权证将不受影响，但于持有人交出其现有的不记名股份权证时，其名字将登记在股东名册上。

我们将于下一期讨论新《公司条例》带来的其他修订。

Key Contacts

Machiuanna Chu

Partner | Corporate Commercial

Email or call +852 2825 9630