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8. Part 12 Company Administration and Procedure

Written Resolutions in lieu of Meetings

 

Section 548 provides for procedures for proposing, passing and recording written resolutions in lieu of passing resolutions in general meetings.

 

Section 549 provides that directors or other members of a company may propose a resolution as a written resolution.

Under section 551, the member of the company who proposes the resolution may request the company to circulate with the resolution a statement of not more than 1,000 words on the subject matter of the resolution.

 

Once a written resolution is proposed, the company has a duty to circulate the resolution to every member for agreement if it has received a request to do so from members representing not less than 5% of the total voting rights or a lower percentage specified in the company’s articles (section 552).

 

According to section 553, the circulation may be effected by sending the copies in hard copy form or electronic form, or by making a copy available on a website.

 

Under section 558, the period for agreeing to the proposed written resolution is 28 days from the time of circulation or such period as specified in the company’s articles.

 

Members may signify their agreement to a proposed written resolution and send it back to the company either in hard copy form or electronic form (section 556).

 

Under section 559, if a resolution is passed as a written resolution, the company must send a notice of that fact to every member and the auditor of the company within 15 days.

 

Dispensation with annual general meetings

 

Companies can dispense with annual general meetings by the unanimous consent of members (sections 612613 and 614).

 

Keeping of Significant Controllers Register

 

With effect from 1 March 2018, all companies incorporated in Hong Kong, except listed companies, are required to obtain and maintain up-to-date information concerning significant controllers of the company by way of keeping a significant controllers register, for inspection by law enforcement officers upon demand.

 

A significant controller (“SC”) includes a “registrable person” (who is a natural person) or a “registrable legal entity” (which is a shareholder of the company) that has “significant control” over the company (sections 653C and 653D).

 

A person or entity has “significant control” over a company if one or more of the following 5 conditions specified in Part 1 of Schedule 5A of the CO are met:

 

  1. the person or entity holds, directly or indirectly, more than 25% of the issued shares in the company or, if the company does not have a share capital, the person or entity holds, directly or indirectly, a right to share in more than 25% of the capital or profits of the company;

 

  1. the person or entity holds, directly or indirectly, more than 25% of the voting rights of the company;

 

  1. the person or entity holds, directly or indirectly, the right to appoint or remove a majority of the board of directors of the company;

 

  1. the person or entity has the right to exercise, or actually exercises, significant influence or control over the company; and

 

  1. the person or entity has the right to exercise, or actually exercises, significant influence or control over the activities of a trust or a firm that is not a legal person, but whose trustees or members satisfy any of the first four conditions (in their capacity as such) in relation to the company.

 

Section 653H provides that a company must keep a significant controllers register (“SCR”) which is either in the English or Chinese language.

 

A SCR must contain the particulars mentioned in Section 653I and Schedules 5B and 5C. Such particulars shall be entered into the SCR within the prescribed time limit (Section 653I). The SCR should be kept at the company’s registered office or a prescribed place in Hong Kong (Section 653M).

 

Section 653P provides that a company is required to take reasonable steps to identify its SC such as issuing notice to any person that the company knows or has reasonable cause to believe to be a SC or to know the identity of another person who is a SC (Section 653P) and must keep the information in the SCR up-to-date (Section 653T).

 

A SCR should be open for inspection by law enforcement officers upon demand and taking of copies by a law enforcement officer (Section 653X).

 

The company is required to designate at least one representative to provide information about the SCR and related assistance to law enforcement officers (Section 653ZC).

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