Wednesday, January 19, 2011
Hong Kong’s new Companies Bill has now been gazetted, and will be introduced into the Legislative Council for its first reading on January 26, 2011.
The Secretary for Financial Services and the Treasury, Professor K C Chan, said: "The Companies Bill is an important piece of legislation for fostering Hong Kong's status as a major international business and financial centre. The gazetting of the bill marks a major milestone in our work to modernize company law."
"The Companies Bill aims to achieve four main objectives, namely, enhancing corporate governance, ensuring better regulation, facilitating business and modernizing the law," he added. "Rewriting the Companies Ordinance (CO) allows us to leverage the developments regarding company law in other comparable jurisdictions and enhance our competitiveness. We look forward to enactment of the Bill in the 2011-12 legislative session."
The rewrite of the CO started in mid-2006, and three public consultations were conducted to gauge views on a number of complex subjects. In the course of the rewrite exercise, the Financial Services and the Treasury Bureau benefited from the advice of the Standing Committee on Company Law Reform as well as four advisory groups and a joint government/Hong Kong Institute of Certified Public Accountants working group, which was set up to advise on specific areas of the rewrite.
Some of the measures introduced by the Bill to enhance corporate governance include: improving the accountability of directors so as to enhance transparency and accountability, and clarifying the directors’ duty of care, skill and diligence; emphasizing shareholder engagement in the decision-making process; improving the disclosure of company information; and strengthening auditors’ rights.
In addition, better regulation will be ensured by means of the accuracy of information on the public register, an improvement to the registration of charges scheme, and a strengthening of the enforcement regime through the Registrar. There will be easier reporting for small- and medium-sized enterprises (SMEs), while SMEs will also be able to prepare simplified financial and directors’ reports.