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

 
Q1.

Are there any changes in the types of companies under the new Companies Ordinance (Cap. 622) (“the new CO”)?

 
Q2.

Does the new provision on the types of companies only apply to companies formed and registered under the new CO?

 
Q3.

Upon implementation of the new CO, what is the status of a company registered as a company limited by guarantee having a share capital under the old Ordinance?

 
Q4.

Upon implementation of the new CO, what is the status of 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 (i.e. item (c) of the table in Q1 above)?

 
Q5.

Are there any changes in the requirements that should be complied with by a company referred to in Q4 above consequential to its being classified as a company limited by guarantee under the new CO?

 
Q6.

Are there any changes in the requirement to file annual returns that should be complied with by a company limited by guarantee under the new CO?

 
Q7.

What is the annual registration fee payable on delivery of an annual return of a company limited by guarantee under the new CO?

 
Q8.

Are there any changes in the requirement for a company limited by guarantee to notify the Registrar of an increase in the number of members under the new CO?

 
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Q1.

Are there any changes in the types of companies under the new Companies Ordinance (Cap. 622) (“the new CO”)?

 
Answer:

Under the old Companies Ordinance (Cap. 32) (“the old Ordinance”), eight different types of companies could be formed. Under the new CO, companies that can be formed are streamlined 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 old Ordinance and the new CO are set out in the table below –

 
 

Types of companies that can be formed under the old Ordinance

Types of companies that can be formed under the new CO

(a)

private companies limited by shares

private companies limited by shares

(b)

non-private companies limited by shares

public companies limited by shares

(c)

private companies limited by guarantee without a share capital

companies limited by guarantee without a share capital

(d)

non-private companies limited by guarantee without a share capital

(e)

private unlimited companies with a share capital

private unlimited companies with a share capital

(f)

non-private unlimited companies with a share capital

public unlimited companies with a share capital

(g)

private unlimited companies without a share capital

                        --
(h)

non-private unlimited companies without a share capital

                        --
 

The types of companies that may be formed under the new CO are provided in section 66. The definitions of the different types of companies are provided in sections 7 to 12.

 
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Q2.

Does the new provision on the types of companies only apply to companies formed and registered under the new CO?

 
Answer:

No. 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. The definitions of the types of companies in sections 7 to 12 of the new CO are applicable to determine, for the purposes of the new CO, the type of company an existing company belongs. In particular, for the purposes of the new CO –

Existing companies that are companies limited by guarantee (whether private or non-private i.e. items (c) and (d) of the table in Q1 above) now form a separate category of companies under section 9 of the new CO, i.e. companies limited by guarantee (“the Guarantee Companies”). These existing companies are required to comply with the requirements in the new CO applicable to Guarantee Companies.


Examples of some new requirements are:

 

Requirement for notification of the company’s new accounting reference date under section 371(2);

Requirement for holding of annual general meeting (“AGM”) within 9 months after the end of the company’s accounting reference period under section 610 (instead of in each calendar year under section 111 of the old Ordinance);

Guarantee Companies may also be qualified for the reporting exemption under Division 2 of Part 9 of the new CO; and

Members of Guarantee Companies are entitled to appoint proxies under section 596 upon removal of the restriction in section 114C(1A) of the old Ordinance relating to companies not having a share capital.

Other examples are given in Q5, Q6 and Q7 below.

 

Existing non-private companies limited by shares (i.e. item (b) of the table in Q1 above) are “public companies” under section 12 of the new CO and are defined as companies other than private companies or Guarantee Companies. These existing companies are required to comply with the requirements in the new CO applicable to public companies.


Example:

There are references to non-private companies in subsections (1) and (3) of section 109 of the old Ordinance which provide that “Except where the company is a private company ……the annual return shall…..” be completed within 42 days after the AGM and a copy of the return including certified copies of the balance sheet and reports shall forthwith be forwarded to the Registrar of Companies ("the Registrar"). Under the new CO such non-private companies are required to comply with the requirement applicable to a public company for delivering the annual return to the Registrar for registration under sections 662(3) and (4)(a).

 
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Q3.

Upon implementation of the new CO, what is the status of a company registered as a company limited by guarantee having a share capital under the old Ordinance?

 
Answer:

Such a company formed before 13 February 2004 (i.e. the date when such type of company can no longer be formed under section 4(4) of the old Ordinance is regarded as a company limited by guarantee under section 9(2) of the new CO.

 
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Q4.

Upon implementation of the new CO, what is the status of 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 (i.e. item (c) of the table in Q1 above)?

 
Answer:

Such a company is a company limited by guarantee under section 9 of the new CO. For more information about the changes in the requirements in relation to this type of company, please refer to Q5 below.


 
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Q5.

Are there any changes in the requirements that should be complied with by a company referred to in Q4 above consequential to its being classified as a company limited by guarantee under the new CO?

 
Answer:

Yes. Pursuant to sections 453 and 456 of the new CO, on the commencement of the new CO, such a company 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 pursuant to sections 662(3), (4)(b), 664 and Part 3 of Schedule 6 to the new CO. For details, please refer to FAQs on Annual Returns of Local Companies.

 
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Q6.

Are there any changes in the requirement to file annual returns that should be complied with by a company limited by guarantee under the new CO?

 
Answer:

Companies limited by guarantee are 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 pursuant to sections 662(3), (4)(b), 664 and Part 3 of Schedule 6 to the new CO. For details, please refer to FAQs on Annual Returns of Local Companies.

 
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Q7.

What is the annual registration fee payable on delivery of an annual return of a company limited by guarantee under the new CO?

 
Answer:

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

Matter

Fee

Annual registration fee for an annual return delivered under section 662(3) of the new CO –

(a)

if the annual return is delivered within 42 days after the company’s return date

$105
(b)

if the annual return is delivered more than 42 days after but within 3 months after the company’s return date

$870
(c)

if the annual return is delivered more than 3 months after but within 6 months after the company’s return date

$1,740
(d)

if the annual return is delivered more than 6 months after but within 9 months after the company’s return date

$2,610
(e)

if the annual return is delivered more than 9 months after the company’s return date

$3,480
 
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Q8.

Are there any changes in the requirement for a company limited by guarantee to notify the Registrar of an increase in the number of members under the new CO?

 
Answer:

The requirement for a company limited by guarantee to notify the Registrar of an increase in the number of members, which is contained in section 114 of the new CO, is the same as the requirement under section 10(3) of the old Ordinance. The requirement is that where a company limited by guarantee has increased the number of its members beyond the registered number, the company must, within 15 days after the increase is resolved by the company or takes place (whichever is the earlier), deliver to the Registrar for registration a notice of the increase. The only change is that a specified form is introduced under the new CO for notification of the increase.

 
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