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The Amendment Ordinance aims to provide companies with greater flexibility to hold fully virtual or hybrid general meetings.
Pursuant to section 584 of the Companies Ordinance (Cap. 622) (“CO”), a company may hold a general meeting at 2 or more places using any technology that enables the members of the company who are not together at the same place to listen, speak and vote at the meeting. However, there is no reference in the CO for a company to hold fully virtual general meetings or the hybrid mode of virtual and physical general meetings.
The Amendment Ordinance modernises the CO and the Companies (Model Articles) Notice (Cap. 622H) to expressly cater for the scenario of companies holding fully virtual general meetings without the requirement for presence of members at any physical locations; as well as a mixed mode of such virtual general meetings and members attending at physical location(s), i.e. hybrid general meetings.
Pursuant to section 584 of the Companies Ordinance (Cap. 622) (“CO”), a company may hold a general meeting at 2 or more places using any technology that enables the members of the company who are not together at the same place to listen, speak and vote at the meeting. However, there is no reference in the CO for a company to hold fully virtual general meetings or the hybrid mode of virtual and physical general meetings.
The Amendment Ordinance modernises the CO and the Companies (Model Articles) Notice (Cap. 622H) to expressly cater for the scenario of companies holding fully virtual general meetings without the requirement for presence of members at any physical locations; as well as a mixed mode of such virtual general meetings and members attending at physical location(s), i.e. hybrid general meetings.
The Amendment Ordinance will come into operation on 28 April 2023.
The major elements of the Amendment Ordinance include:
- introducing a new definition of virtual meeting technology;
- providing that notice of a general meeting to members or on a website must specify, among other matters, the physical venue of the meeting or the virtual meeting technology to be used for holding the meeting, or both;
- providing that the notice may specify the virtual meeting technology to be used for holding the meeting unless the company’s articles expressly preclude the holding of a general meeting by using virtual meeting technology or require a general meeting to be held only at a physical venue;
- setting out the mode of holding a general meeting;
- clarifying that when a general meeting of a company is held at 2 or more physical venues, the company must use any technology that allows the members of the company who are not together at the same physical venue to listen, speak and vote at the meeting regardless of whether virtual meeting technology is also used for holding the meeting; and
- providing that a person who attends a general meeting by using the virtual meeting technology specified in the notice of the meeting is to be regarded as being present.
No. The Amendment Ordinance is only applicable to companies formed and registered under the Companies Ordinance (Cap. 622) or a former Companies Ordinance, i.e. locally incorporated companies.
Section 583A of the Companies Ordinance (Cap. 622) sets out the mode of holding a general meeting. Subject to the provisions of the company’s articles of association, a company may hold a general meeting –
- at a physical venue (i.e. a physical meeting);
- by using virtual meeting technology (i.e. a fully virtual meeting); or
- both at a physical venue and by using virtual meeting technology (i.e. a hybrid meeting).
Under section 547(1) of the Companies Ordinance (Cap. 622), “virtual meeting technology” means a technology that allows a person to listen, speak and vote at a meeting without being physically present at the meeting. As such, the virtual meeting technology to be used for holding fully virtual or hybrid general meetings must allow persons attending the general meetings to listen, speak and vote at the meetings.
When choosing to hold fully virtual or hybrid general meetings, companies must ensure that legitimate participants of the general meetings would be able to listen, speak and vote through the technology employed at the meetings, therefore the interest of the stakeholders of the companies would not be undermined because of the mode of the holding of general meetings. Besides, safeguards for conducting general meetings provided under the Companies Ordinance (Cap. 622) and common law would be applicable to fully virtual or hybrid general meetings.
According to section 584(1) of the Companies Ordinance (Cap. 622), when a general meeting of a company is held at 2 or more physical venues (whether or not also by using the virtual meeting technology specified in the notice of the meeting), the company must use any technology that allows its members who are not together at the same physical venue to listen, speak and vote at the meeting.
According to section 576(1) of the Companies Ordinance (Cap. 622), the company must ensure that the notice of the meeting specifies, among other matters, the physical venue of the meeting or the virtual meeting technology to be used for holding the meeting, or both.
According to section 573(2) of the Companies Ordinance (Cap. 622), the notification for notifying members of the availability of the notice of meeting on the website must specify, among other matters –
- if the notice specifies only the physical venue of the meeting – the physical venue;
- if the notice specifies only the virtual meeting technology to be used for holding the meeting – the virtual meeting technology; and
- if the notice specifies both the physical venue of the meeting and the virtual meeting technology to be used for holding the meeting – both the physical venue and the virtual meeting technology.
No. Notwithstanding a company’s existing articles may refer to a place or places for conducting a general meeting, the company may hold a general meeting by using virtual meeting technology without amending its articles unless the company’s articles expressly preclude the holding of a general meeting by using virtual meeting technology, or require a general meeting to be held only at a physical venue (see section 583A(3) of the Companies Ordinance (Cap. 622)).
No. A provision of the company’s articles having the effect of requiring a notice of a general meeting to specify the physical venue of the meeting is not in itself a provision that requires a general meeting to be held only at a physical venue (see section 583A(3)(b) of the Companies Ordinance (Cap. 622)).
Yes. Section 585(4A) of the Companies Ordinance (Cap. 622) provides that a person who attends a general meeting by using the virtual meeting technology specified in the notice of the meeting is to be regarded as being present while so attending.
The key amendments to the respective model articles in Schedules 1, 2 and 3 to the Companies (Model Articles) Notice (Cap. 622H) include the following –
- A new definition of “Virtual meeting technology” is added which means a technology that allows a person to listen, speak and vote at a meeting without being physical present at the meeting.
- A notice of a general meeting must specify, among other matters, the physical venue of the meeting, or the virtual meeting technology to be used for holding the meeting, or both.
- A person who attends a general meeting by using virtual meeting technology is to be regarded as attending the meeting if –
- the person uses the virtual meeting technology specified in the notice of the meeting; and
- the person is able to exercise his or her rights to speak and vote at the meeting.
- the person uses the virtual meeting technology specified in the notice of the meeting; and
- A person who attends a general meeting by using the virtual meeting technology specified in the notice of the meeting is to be regarded as being present.
- When a general meeting that is not called on a request of members is adjourned because a quorum is not present, the directors must determine, among other matters, the physical venue of the adjourned meeting or the virtual meeting technology to be used for holding the adjourned meeting, or both.
- When the chairperson adjourns a general meeting, the chairperson must specify, among other matters, the physical venue of the adjourned meeting or the virtual meeting technology to be used for holding the adjourned meeting, or both.
- If no notice of an adjourned meeting is given, a person who uses virtual meeting technology to attend the adjourned meeting is to be regarded as being present if the person attends the adjourned meeting by using the virtual meeting technology determined by the directors or specified by the chairperson.
To remind companies of matters needing their attention when convening fully virtual or hybrid general meetings, the Companies Registry has issued the “Guidance Note – Good Practice on Holding Virtual or Hybrid General Meetings” (“Guidance Note”) which seeks to provide general information and good practices on the holding of fully virtual or hybrid general meetings by locally incorporated companies. Please refer to the Guidance Note for details.
The Amendment Ordinance aims to provide sufficient flexibility for companies to conduct corporate affairs smoothly and effectively having regard to their own circumstances and needs. It does not remove the mode of holding general meeting at a physical venue, i.e. physical general meeting. Companies should choose the most appropriate mode of meeting and will need to consider, in addition to convening a valid meeting in accordance with the law and their articles, whether a physical general meeting continues to be the most appropriate mode or that holding a fully virtual or hybrid general meeting may promote better engagement with and maximise participation by members.
There is no “one-size fits all” approach to the holding of physical, virtual or hybrid general meetings. Ultimately, in deciding the mode of holding general meetings, companies should aim to promote engagement with members and encourage their participation at meetings and, having considered the best interest of their members, opt for the most appropriate mode of meeting. The mode of meeting should not be a means of managing attendance or limiting the ability of members to participate in meetings and raise questions.
