With the exception of a few specific transactions (most of which involve the purchase or repurchase of a company`s own shares), there was no provision in the old business corporation regulations that limited members` voting rights or required members to abstain from voting when dealing with transactions in which they are involved. In the new regulation, there is a new requirement, in particular for public limited companies, for the consent of altruistic members for related transactions, namely that during the audit, if the corresponding decision is taken, any vote cast by interested members for the resolution would not be taken into account (§§ 496(2)(ii.b(ii) and (5), section 515(1.b (ii) and (4)), 518(2)(b)(ii), (4) and (5) and 532(2)(b)(ii) and (4)). The new regulation introduces that directors` reports prepared by public limited companies and companies that are not qualified for a simplified report must include an analytical and forward-looking “business review”, while private companies can be removed from the requirement by a special decision. For example, the review should include information on environmental and employee issues that have a significant impact on the business. The new requirement is in line with the international trend towards integrated reporting (Article 388 and Annex 5). If a company has entered into an equity agreement in a financial year, the directors` report must state the following: Management restriction In the old Companies Regulation, there were provisions prohibiting all public limited companies as well as private companies that are members of a group of companies of which a listed company is a member from appointing a company as its Director. For other private companies, there were no restrictions. In addition to these restrictions, the new regulation requires that private companies have at least one manager who is a natural person (§ 457). {Stored as in [this Annual Report / the XYZ mentioned above / Note X to the Annual Financial Statements]} no equity agreement has been entered into by the Company during [year/period].
Specifically, the new regulations improve the standard of corporate governance in Hong Kong. The operation of companies will become more transparent and the accountability of directors will be strengthened. This article aims to highlight some of the most important issues related to directors. The Regulations (S388(1)(b)) summarize the content of the directors` report as set out in section 390 and Schedule 5 to the Companies Regulations (Chapter 622) and includes additional elements in the directors` report such as directors` interest, donation, recommended dividends, capital issue, bond issue, share agreement, the reasons for the resignation of the directors and the eligible identity disposition. The Companies (Directors` Report) Regulation (Cap 622D) (the Regulation) introduces a new requirement that a directors` report must contain information on agreements related to shares. According to Article 6 of the Regulation, this requirement, which does not apply to companies covered by the exemption from reporting, is intended to increase transparency without unnecessarily increasing the compliance burden or costs for businesses. The new Companies Ordinance, Chapter 622 of the Laws of Hong Kong, was promulgated on 3 March 2014 to create a modernized legal framework for the establishment and operation of businesses in Hong Kong. The main objectives of the new regulation are to improve corporate governance, facilitate business, ensure better regulation and modernise company law in Hong Kong. is required to disclose in a year`s management report all equity agreements that the company entered into during that fiscal year, as well as all equity agreements that the company has entered into in the past and that still existed at the end of that fiscal year. Given that it is common nowadays for companies to enter into agreements that lead or may lead to the issuance of shares by companies, and that the issuance of new shares can dilute the interests of existing shareholders, the disclosure of this information will improve transparency and the protection of shareholders` interests. (1) The directors of a company must draw up for each financial year a report which: – an agreement which will lead or may lead to the issue of shares by the company; or For the purposes of Section 10, agreements, transactions or contracts are agreements, transactions or contracts that are “substantial” in connection with the Company`s business. (5) Paragraphs 1, 2 and 3 apply subject to Article 389, which expressly lays down the conditions under which the company becomes a public limited liability company and, consequently, must draw up a report of the members of the management in accordance with Article 388(1) or (388)(2).
Details of the Company`s annual results are presented on page [6] of the annual financial statements. A directors` report contains the details of an agreement, transaction or contract entered into during a fiscal year by a particular corporation of the corporation in which the directors have a direct or indirect material interest. If a director of a corporation has resigned or refused to stand for re-election in a fiscal year, AND the corporation has received written notice from the director that the resignation or rejection is due to reasons related to the affairs of the corporation. 2. The directors` report for each year in which the contract is in force contains: — Another new requirement laid down in the regulation concerns the disclosure of the reasons for the resignation or refusal of the right of a member of the management to stand as a candidate. Article 8 of the Regulation provides that: (a) the company is covered by the exemption from reporting for the financial year; Details of the [convertible] bonds issued by the Company are disclosed in Note X to the annual financial statements. The start of the new regulations marks a new chapter in Hong Kong`s corporate governance. The new regulation clarifies the legal provisions relating to directors` obligations in various respects and introduces more effective rules to deal with directors` conflicts of interest. It strengthens Hong Kong`s status as an important international commercial and financial center and strengthens Hong Kong`s competitiveness as a business location.
The company is engaged in the provision of [advertising services / general trade]. / The main shares [activity/activities] of the company [is/ are] [investment holding / real estate rental / sale of vehicles]. Disclosure of the reasons for the resignation or refusal to stand for re-election of a particular corporation (指明企業) in respect of a corporation means: If, at the end/at any time of the fiscal year, the following agreement exists/exists, the directors` report must disclose its effects: Sections 388 to 391 and Section 543(2) deal with the directors` report. The Company OR a specific company of the Company (4) A resolution for the purposes of paragraph (3) (c) – (2) A report of the directors must contain details of any other matter – An agreement that obliges the Company to enter into the above agreement. The following also applies to the directors` report: (c) for each class of shares/debentures, the number of shares issued and the consideration received by the Company for the issue. The [sole director(s)] shall not recommend the payment of dividends for [the year/period]. (c) complies with other requirements of the Regulation. For disclosure: • the effect of the agreement (e.g., what benefits the directors would receive, how long the agreement would last, etc.) • Names of the directors (during the year) or their agents [Section 5/5A]: Issued Shares/Debentures issued [Section 10]: Material interests in transactions, agreements or contracts (not applied to corporations excluded from the return) Note 5 (S388(1)(a)) specifically provides for the review of activities that the the administrator must include. . . .