Yes. Section 457(2) of the new CO requires that every private company must have at least one director who is a natural person (i.e. an individual).
The new requirement on directors of private companies will enhance transparency and accountability of directors.
The new CO has come into operation on 3 March 2014. The new requirement is applicable to all private companies registered under the new CO. Regarding the position of private companies registered under the old Companies Ordinance (Cap. 32) ("the old Ordinance"), see Answer to Q4 below.
Pursuant to sections 89(1) and (2) of Schedule 11 to the new CO, there is a grace period of 6 months after the commencement date of the new CO for companies registered under the old Ordinance to comply with the new requirement. Appointment of new directors should be reported to the Registrar of Companies ('the Registrar") in the specified form within 15 days pursuant to section 645 of the new CO.
No. The grace period only applies to private companies registered pursuant to the old Ordinance. All private companies registered under the new CO must have at least one natural person as director on incorporation.
Pursuant to section 458 of the new CO, the Registrar may direct the company to appoint a director who is a natural person in compliance with the requirement. If a company fails to comply with the direction, the company and every responsible person of the company commit an offence, and each is liable to a fine of $100,000 and for a continuing offence, a further fine of $2,000 for each day during the period.
Section 456 of the new CO maintains the restriction on corporate directorship in public companies, companies limited by guarantee and private companies which are members of a group of companies of which a listed company is a member. This restriction, however, does not apply to other private companies which are required to have at least one director who is a natural person to enhance transparency and accountability.
So long as the private company is not a member of a group of companies of which a listed company is a member, a body corporate can continue to act or be appointed as its director. However, section 457 of the new CO requires that every private company must have at least one director who is a natural person.
No. An existing dormant company will only need to comply with the requirement to have at least one director who is a natural person when it ceases to be a dormant company pursuant to section 5(5) of the new CO. Please refer to sections 89 (3) and (4) of Schedule 11 to the new CO.
No. The new requirement only applies to local private companies.
Please also see FAQs – Local Limited Companies