On March 3, 2014, the new Hong Kong Companies Ordinance is effective: the amendments include changes related to the nature, responsibilities and role of the Directors of Ltd established in HK: we can summarize the main points as follows:

  1. Public Companies and private companies belonging to a group in which one is a listed company cannot appoint a company as director.
  2. Private companies (with the exception as per point 1) above) may appoint one or more company(ies) as director provided that at least one director is an individual. 
  3. The shadow Director (i.e. a person or a company that, without holding the formal title of director exercise the relevant powers in the company) shall have the same duties of diligence and shall fulfill the same requirements of competence that the new law sets for the formal directors, and may be liable in case of breaches or violations. 
  4. The new Companies Ordinance requires the conduct of directors to be ratified by disinterested members’ approval to prevent conflicts of interest and possible abuse of power by interested majority shareholders in ratifying the unauthorized conduct of directors. Such ratification of conduct by a director amounting to negligence, default, breach of duty or breach of trust in relation to the company must be approved by resolution of the members of the company disregarding the votes in favour of the resolution by the director, any entity connected with the director and any person holding shares of the company in trust for the director or for the connected entity.

Of course, the above is just a short summary of the main points of the Ordinance related to Directors and Company Secretaries issues: please feel free to contact us should you require additional details or information.

Digiprove sealCopyright secured by Digiprove © 2014 ICL Consulting Limited

Leave a reply