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Among the criteria which apply to companies of Hong Kong which are explicitly stated within the Companies Ordinance relate to topics such as the rights and powers granted to a company based in Hong Kong, the regulations regarding the shareholders and directors of the company, the name of the company, and how a company may be restored after it has been struck off the Companies Registry.

The Companies Ordinance has existed for many years through changing economic and business conditions which have been present in Hong Kong. Thus, on multiple occasions, revisions of the Companies Ordinance have been made. Some changes significantly impacted Hong Kong’s business scene, while others had a more minor effect.

Latest Changes to the Companies Ordinance

The most recent revision of Hong Kong’s Companies Ordinance is the Companies (Amendment) (No 2) Ordinance 2018. Although the year in its full title is 2018, this revision only took effect on February 1, 2019. This revision of the Companies Ordinance included 114 edits to various sections, schedules, and regulations to better reflect the current business environment of Hong Kong and how companies are to operate within it.

The amendments addressed new developments, clarified policy purposes, and removed ambiguities and inconsistencies.

Perhaps the companies which were the most impacted by the amendments to the Companies Ordinance were holding companies based in Hong Kong. Holding companies which are part of two different types of corporate groups are now permitted to take advantage of the reporting exemption. Holding companies and subsidiaries meeting size criteria can use simplified accounting and financial reporting standards.

Modifications to Definitions

The definition of a Hong Kong-based holding company has been updated to align with current accounting standards. The key factor in determining if a business entity is a subsidiary is the location of control. Wholly owned subsidiaries that are holding companies can now opt to prepare consolidated financial statements.

Modifications to Company Articles and Financial Planning for Legal Resilience

Hence, there were several other modifications which changed how Hong Kong companies were to operate their company articles. Companies are now permitted to display their articles in electronic form; thus, a physical copy is no longer a requirement. The articles of any company with a name which has been registered in both English and Chinese must also now include both names. Moreover, the Companies Ordinance exempts name changes from registration requirements if the articles of a Hong Kong company are altered.

Revisions to the Companies Ordinance could impact your company’s location of control now determines if a business entity is a subsidiary of a parents finances if you are unprepared. For this reason, we at Paul Hype Page & Co. will offer you our financial planning services. We’ll create a financial plan for your Hong Kong company, ensuring resilience against any legal changes affecting its stability.

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