Four steps and points to note when amending the articles of association of a Hong Kong company!

In the Hong Kong business environment, the Articles of Association set out the rules for the internal management of a company, including the powers of directors, the rights and obligations of shareholders, and the way the company operates on a day-to-day basis. However, as a company grows and changes, the need to amend the articles of association may arise. This article will guide you through how to amend the articles of a Hong Kong company in accordance with the Hong Kong Companies Ordinance.

Requirements for amendment of articles under the Companies Ordinance

Under Division IV – Amendments of Articles of the Hong Kong Companies Ordinance, a Hong Kong company may amend its articles of association by a special resolution. A special resolution is a resolution passed by shareholders at a general meeting with at least 75% of the votes cast in favor of the resolution. Amendments can cover a wide range of topics, including the way the company operates, the rights and obligations of shareholders and directors, and the structure and management of the company.

Step 1: Proposing Amendments

When a Hong Kong company wishes to amend its articles of association, someone first needs to propose the amendment. This is usually done by the board of directors or shareholders. The proponent will need to prepare a detailed document stating the changes desired and the reasons for them.

Step 2: Call a General Meeting of Shareholders

Once the proposal has been accepted, the company needs to call a general meeting to discuss and vote on the resolution. According to the Companies Ordinance, the notice period for a general meeting should be not less than 14 days. At the general meeting, shareholders will discuss and vote on the proposed amendments.

Step 3: Voting

At the general meeting, at least 75% of the votes cast are required to pass a special resolution to amend the Articles of Association. Upon passage, the amendment is effective immediately and should be recorded in the company’s bylaws.

Step 4: Filing with Companies Registry

After amending the articles of association, the Hong Kong company needs to submit the notice of special resolution, the amended articles of association and the supporting documents for the changes to the Hong Kong Companies Registry within 15 days.

Points to note

1. Date of amendment and effective date should be stated

If there is any alteration to the articles of association of a company, the company must include the alteration in the text of every copy of the articles issued on or after the date on which the alteration takes effect.

2. Amendments affecting the status of a private company

If a private company amends its articles in such a way that the articles no longer comply with the requirements for a private company, the company must deliver to the Registrar for registration a notice of the change in the status of the company and a copy of the annual financial statements in the specified form within 15 days after the date on which the amendment takes effect.

3. Amendments affecting the status of a public company

If a public company amends its articles so that the articles no longer qualify as a public company, the company must, within 15 days after the date on which the amendment comes into effect, deliver to the Registrar for registration a notice of the change of status, which must be in the specified form.

4. Modifications by order of the Court of First Instance

If the effect of a company’s articles, or any provision of them, is altered by an order of the Court of First Instance, the company must, within 15 days after the date on which the alteration takes effect, deliver to the Registrar for registration a notice of the alteration, which must be in the specified form.

5. Provision of copies of articles to members

Finally, under section 98 of the CO, a company is required to provide a copy of the articles to any member upon request.

Amending the articles of association is a complex process that requires an in-depth understanding of Hong Kong company law. A professional legal or accounting advisor can provide valuable guidance and advice to help you through the process. Whether your Hong Kong company is large or small, it is important to understand how to amend your articles of association. The above information is for reference only. If you have any questions or information regarding tax filing (personal tax return, corporate tax return, CPA tax return), we welcome you to contact our professional advisors and provide you with a free quote and consultation service at a later date.