Hong Kong Company Objects
Change of Objects Clause: Modifying the company's stated business purposes
In Hong Kong, the "Objects Clause" has been replaced by the "Objects" section within the Articles of Association (A.O.A.). This change occurred with the implementation of the New Companies Ordinance (Cap. 622) in 2014.
Key Points:
Optional: Unlike the previous requirement, including objects in the A.O.A. is now optional.
Broad Scope: If objects are not stated, a Hong Kong company has the same capacity as a natural person, subject to any restrictions in its constitutional documents.
Flexibility: This change provides greater flexibility for companies to adapt to changing business needs without needing to amend their A.O.A. frequently.
Implications:
For Companies with Objects: If a company chooses to include objects, they should be carefully drafted to avoid unnecessary restrictions on the company's activities.
For Third Parties: When dealing with a Hong Kong company, it's advisable to review the A.O.A. to determine if there are any limitations on the company's powers.
To learn more:
You can consult the relevant sections of the New Companies Ordinance (Cap. 622).
Modifying the company's stated business purposes
Under Hong Kong's New Companies Ordinance, modifying a company's stated business purposes generally requires amending the company's Articles of Association (A.O.A.). Here's a breakdown of the process:
1. Board Resolution:
The company's board of directors must pass a resolution authorizing the amendment of the A.O.A. to change the business purposes.
2. Special Resolution:
A special resolution is required from the company's shareholders to approve the proposed amendment. This typically involves a majority of at least 75% of the votes cast by shareholders entitled to vote on the resolution.
3. Filing with the Companies Registry:
Once the special resolution is passed, the company must file the amended A.O.A. with the Companies Registry.
4. Other Considerations:
Legal and Tax Implications: It's essential to consult with legal and tax professionals to understand the potential legal and tax implications of the proposed changes.
Third-Party Contracts: If the company has existing contracts that are affected by the change in business purposes, it may need to amend those contracts as well.
Sample Resolutions
Here's a sample Board Resolution for a company's board of directors to authorize the amendment of the Articles of Association (A.O.A.) to change the company's business purposes:
BOARD RESOLUTION
[Name of Company]
[Date]
RESOLUTION NO.: [Resolution Number]
SUBJECT: Amendment of Articles of Association to Change Business Purposes
WHEREAS, [Name of Company] is a company duly incorporated under the laws of Hong Kong; and
WHEREAS, the Board of Directors of [Name of Company] (the "Board") desires to amend the Articles of Association of [Name of Company] (the "A.O.A.") to change the company's business purposes as set out in [Specify the current business purposes as stated in the A.O.A.]; and
WHEREAS, the Board considers it in the best interests of [Name of Company] to amend the A.O.A. to reflect the company's current and future business activities; and
WHEREAS, the proposed amendment to the A.O.A. is as follows:
[Clearly state the proposed changes to the business purposes. For example:
Delete the existing clause regarding business purposes.
Replace the existing clause with a new clause stating the revised business purposes.
Add a new clause to the A.O.A. stating the revised business purposes.]
NOW, THEREFORE, BE IT RESOLVED that the Board hereby resolves to amend the A.O.A. of [Name of Company] in accordance with the terms set forth above.
BE IT FURTHER RESOLVED that the Chairman or any Director duly authorized by him is hereby authorized to take all such actions and execute all such documents as may be necessary or expedient to give effect to this Resolution.
PASSED this [Day] day of [Month], [Year].
[Signatures of Directors]
Name of Director: _________________________
Signature: _________________________
Name of Director: _________________________
Signature: _________________________
Note:
This resolution only authorizes the amendment of the A.O.A. A special resolution of the shareholders is still required to approve the amendment.
Here's a sample Special Resolution for a company's shareholders to approve the proposed amendment to the Articles of Association (A.O.A.) to change the company's business purposes:
SPECIAL RESOLUTION
[Name of Company]
[Date]
RESOLUTION NO.: [Resolution Number]
SUBJECT: Amendment of Articles of Association to Change Business Purposes
WHEREAS, [Name of Company] is a company duly incorporated under the laws of Hong Kong; and
WHEREAS, the Board of Directors of [Name of Company] (the "Board") has passed a resolution (Resolution No. [Resolution Number]) dated [Date of Board Resolution] authorizing the amendment of the Articles of Association of [Name of Company] (the "A.O.A.") to change the company's business purposes as set out in the said resolution; and
WHEREAS, the proposed amendment to the A.O.A. is as follows:
[Clearly state the proposed changes to the business purposes. For example:
Delete the existing clause regarding business purposes.
Replace the existing clause with a new clause stating the revised business purposes.
Add a new clause to the A.O.A. stating the revised business purposes.]
NOW, THEREFORE, BE IT RESOLVED that the shareholders of [Name of Company] hereby approve the amendment of the A.O.A. as set out above.
PASSED this [Day] day of [Month], [Year], at a General Meeting of the shareholders of [Name of Company] duly convened and held.
[Signatures of Shareholders]
Name of Shareholder: _________________________
Signature: _________________________
Number of Shares: _________________________
Name of Shareholder: _________________________
Signature: _________________________
Number of Shares: _________________________
Notes:
This resolution must be passed by at least 75% of the votes cast by shareholders entitled to vote on the resolution.
The resolution should be properly recorded in the minutes of the shareholders' meeting.
Key Points:
Optional Nature of Objects: Remember that under the New Companies Ordinance, including objects in the A.O.A. is optional. If your company doesn't have stated objects, you may not need to amend the A.O.A. to change your business activities.
How Bestar can Help
Bestar can play a crucial role in assisting with the change of objects clause in Hong Kong. Here's how we can help:
Advise on Legal Requirements: We can guide you through the legal requirements for amending the Articles of Association (A.O.A.), including the necessary resolutions (board resolution and special resolution) and filing procedures with the Companies Registry.
Draft Legal Documents: We can draft the necessary resolutions, amended A.O.A., and other legal documents required for the process.
Assess Legal Implications: We can analyze the potential legal implications of the proposed changes, including any potential conflicts with existing contracts or regulatory requirements.
Ensure Compliance: We can help ensure that the entire process is carried out in compliance with all applicable laws and regulations.
Analyze Tax Implications: We can assess the potential tax implications of the changes to the company's business purposes. This may include changes to tax rates, eligibility for tax incentives, or other tax-related matters.
Advise on Tax Planning: We can help you develop tax-efficient strategies to minimize the potential tax impact of the changes.
Prepare Tax Filings: We can assist with the preparation and filing of any necessary tax returns or notifications to the tax authorities.
Key Benefits of Seeking Bestar's Help:
Expertise: Benefit from specialized knowledge and experience in Hong Kong company law and taxation.
Efficiency: Save time and effort by delegating complex legal and tax tasks.
Reduced Risk: Minimize the risk of legal or tax errors and penalties.
Peace of Mind: Have peace of mind knowing that the process is being handled by qualified professionals.
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