Under the old Companies Ordinance (Cap. 32) ("the old Ordinance") companies incorporated in Hong Kong and having a share capital were required to have a par value ascribed to their shares. This represented the minimum amount at which a share can be issued.
Companies must also declare in their Memorandum of Association the maximum amount of share capital that may be issued by the company (the requirement for "authorised share capital").
The amount of the excess of the issue price of the share over its par value is designated as "share premium". Under the old Ordinance, there were restrictions on how a company could deal with share premium and how it had to be accounted for.
Under the new CO, as a result of migration to mandatory no-par, relevant concepts such as par value, share premium, and requirement for authorised share capital are no longer necessary and are abolished.
A company has greater flexibility to alter its share capital in a no-par environment, for example, a company is able to capitalise its profits without issuing new shares and to allot and issue bonus shares without increasing its share capital (section 170 of the new CO).