AA Amendments

The articles of incorporation are the fundamental rules that define the organization and activities of a company. The contents of the articles are detailed according to the company’s circumstances but must not conflict with commercial law. If they do, they may be invalidated, so they must be handled carefully.

The commercial law stipulates the essential items that must be included in the articles. In addition to the minimum mandatory items specified by law, the contents are drafted according to the company’s needs. As business progresses, the provisions of the articles may be amended as necessary.

In Hong Kong, the standard Articles of Association provided by the Companies Registry are commonly used when establishing a company. The Companies Registry offers four standard articles:

• Sample A: Simplified form of articles for a private company (non-listed company)
• Sample B: Model articles for a private company (non-listed company)
• Sample C: Model articles for a public company (listed company)
• Sample D: Model articles for a company limited by guarantee

Generally, Sample A: Simplified Articles for a Private Company is chosen. Here are the contents included in the articles:

Contents of the Articles (Based on Simplified Articles for a Private Company)

Part A. Mandatory Items

These are essential items that must be included according to Hong Kong law, covering the company’s basic details (company name, type of company, basic capital information, etc.).

Part B. Mandatory Items

These are the rules regarding the company’s organization and activities. The standard articles present general provisions for the following matters, which may need to be revised according to the company’s circumstances at the time of establishment or thereafter. Therefore, it is necessary to ensure that important business matters or contracts align with the articles. The contents of the standard articles are broadly as follows:

Matters Related to Directors

• Authority and responsibilities of directors (general authority and restrictions)
• Decision-making by directors (procedures and details for making decisions, convening and holding meetings, participation methods, quorum, appointment of the chair, chair’s authority, management of board minutes, etc.)
• Appointment and removal of directors
• Directors’ remuneration and expenses
• Directors’ indemnity and insurance

Matters Related to the Company Secretary

• Appointment and removal of the company secretary

Matters Related to Shareholders

• Decision-making by shareholders (procedures and details for making decisions, convening and holding meetings, quorum, appointment of the chair, adjournment, etc.)
• Voting at shareholders’ meetings (regulations for voting, methods of requesting votes, number of votes, appointment of proxies, amendments to resolutions, etc.)

Matters Related to Shares and Dividends

• Conditions for recognizing paid-up shares
• Share certificates (details on issuance, replacement methods, etc.)
• Transfer and inheritance of shares
• Changes in capital, reduction of capital, share buyback, capital increase
• Dividend procedures
• Payment of dividends
• Dividends in kind

Other Matters

• Use of the company seal
• Rights to inspect company information
• Company liquidation
• Amendment procedures for the articles

The Amendment Procedure Generally Involves the Following Steps:

1. Draft the amendment proposal.
2. The board of directors resolves to convene a general meeting of shareholders and notifies shareholders of the meeting.
3. The general meeting of shareholders resolves to amend the articles.
4. Report the amendment to the Companies Registry according to the resolved contents.

Depending on the situation, the order and details of the procedures may vary.

In Conclusion…

The articles of incorporation are often set up initially just to meet formalities and then neglected. This can sometimes lead to transactions or contracts that violate the articles. To prevent this, it is recommended to check with the company secretary before making significant business changes or decisions to ensure no necessary administrative procedures are overlooked.

Olive & Vine offers amendment services and various corporate services. If you have any questions about the content or other corporate management in Hong Kong, please contact us at contact@oliveandvinehk.com or through the customer support section on our website.