Types of companies under the new Companies Ordinance and changes affecting companies limited by guarantee

Under the new Companies Ordinance (Cap. 622) ("new CO"), the types of companies that can be formed are streamlined from eight types under the old Companies Ordinance (Cap. 32) ("the old Ordinance") into five types, with abolition of some types of companies which are obsolete and re-grouping others into new categories.

• The types of companies that may be formed under the new CO are –

• private companies limited by shares

• public companies limited by shares

• companies limited by guarantee without a share capital

• private unlimited companies with a share capital

• public unlimited companies with a share capital

• Under section 17, the new CO applies to an existing company formed and registered under any of the former Companies Ordinances prior to the commencement of the new CO. For the purposes of the new CO –

• Existing companies that are companies limited by guarantee (whether private or non-private) form a separate category of companies under section 9 of the new CO, i.e. companies limited by guarantee. These existing companies are required to comply with the requirements in the new CO applicable to companies limited by guarantee.

• Existing non-private companies limited by shares are "public companies" under section 12 of the new CO and are defined as companies other than private companies or companies limited by guarantee. These existing companies are required to comply with the requirements in the new CO applicable to public companies.

• A company limited by guarantee registered under the old Ordinance and which comes within the meaning of "private company" under section 29 of the old Ordinance is a company limited by guarantee under section 9 of the new CO. It is required to have at least 2 directors and a body corporate must not be appointed as a director. Such a company is required to file annual returns together with certified true copies of the relevant financial statements, directors’ reports and auditor’s report in respect of every financial year of the company.

• An escalating scale of annual registration fee is introduced by the Companies (Fees) Regulation (Cap. 622K) for the filing of an annual return of a company limited by guarantee to encourage compliance of statutory filing requirement. In the case of late filing, substantially higher registration fees are payable. The escalating fee scale is the same as the one applicable to a private company limited by shares.