The Background of Companies Ordinance Rewrite

The CO provides the legal framework which enables the business community to form and operate companies. It also sets out the parameters within which companies must operate, so as to safeguard the interests of those parties who have dealings with them, such as shareholders and creditors.

The CO is one of the longest and most complex pieces of legislation in Hong Kong, with over 600 sections and 20 schedules. It was last substantially reviewed and amended in 1984, and is broadly in line with the major United Kingdom (UK) company law reforms contained in the Companies Act 1948 and some subsequent reforms, such as those contained in the Companies Act 1976. The Standing Committee on Company Law Reform (SCCLR) was formed in 1984 to advise the Government on necessary amendments to the CO on a continuous basis.

Over the past decade, the SCCLR and the Government have conducted several major reviews with a view to modernizing the company law and upgrading its corporate governance regime, resulting in recommendations to amend various sections of the CO. In the past few years, we have implemented some of those recommendations by means of several amendment bills, most notably the Companies (Amendment) Ordinance 2003 and the Companies (Amendment) Ordinance 2004.