Areas in Hong Kong Company Law to Review

AREAS IN HONG KONG COMPANY LAW TO REVIEW

Topic 1 Company

 Distinction of an individual, partnership and a company and the advantages and disadvantages.  The principle of corporate veil and the case of Salomon v Salomon.  Public company v private company and the requirements of s 29.  Who is a promoter  Obligations of promoter  Pre incorporation contracts and ratification under s32 A  Memorandum and articles of association  Purpose of each  What are the objects of a company and the distinction between objects and powers  Alteration of articles and memorandum  Purpose and effect of articles and memorandum  Contract between company and members and company and members

Topic 2 Share Capital

 Meaning of authorised capital, nominal capital, par value,  Capital can be paid up, unpaid, partly paid (called and uncalled)  Types of shares  Preference, redeemable and non redeemable o Ordinary o Class  Variation of class rights  Shares issued at a premium and a discount  How are shares issued o Founder members o Allotment v issue o Transfer o Transmission  Importance of share certificate and being on the register as a member.  What if the transfer is a forgery  Doctrine of Estoppel  Payment of dividends as a reward to shareholders o Cash o Scrip dividends o Bonus shares  Raising capital  Rights Issue  Prospectus requirements

1 o Duty of Care o Misleading Statements  Raising funds by way of debt  Debentures o Secured o Unsecured o Period . Fixed . Perpetual . Convertible . Fixed Charge . Floating Charge . Registration

Topic 3 Officers of the Company

 Appointment  Qualification of Directors  Who can not be a director  Shadow director  His duties under Common Law o Act in good faith and put interest of company first o Fiduciary Duty o Avoid Conflict of Interest o Duty of Skill and Care o Duty to be diligent o Independent mind  Executive and Non Executive Directors  The Rule in Foss v Harbottle  Directors acting within their authority  S 168A  Statutory Duties  The rule in Turquand’s case  Is the action by director within his power  Removal of directors by special resolution  Retirement of director  Resignation of director  Disqualification of Director o His actions or inactions o By the Companies Ordinance  When is a director unfit? o Breach of Companies Ordinance o Convicted of criminal offence or civil offence for persistent breaches

2 o Examples of unfit in case law  Company Secretary o Appointment o Qualifications o Duties o His power and authority Auditor Appointment by directors Who he reports to the members Duty Accounts present a true and fair view Independent Duty of care Audit Committee Resignation Removal

Topic 4 Meetings

 Board Meetings by operators (directors)  General Meetings of owners o AGM o EGM  Board Meetings o How are they held? o Chairman o Quorum o Committees o Voting by majority o Validate acts of directors o Minutes in writing  General meetings o AGM . When held . Who can call a meeting . Meaning of Convene and Requisition o EGM . Who can call  Notice period for meetings  How are meetings run o Chairman o Agenda . Proposal . Motion . Discussion

3 . Resolution . Recorded  Resolutions o Ordinary by majority o Special by 75%  Service of notice o Post or electronic  What is a proxy  Purpose of Minutes

Topic 5 & 6 Non Hong Kong Companies

Not examinable and not discussed in class

Topic 7 Receivership and Liquidation

 What is a receiver?  Who appoints a receiver  Debenture holder  Court  Who does he represent?  What is his role  What is a receiver/manager  What happens to contract with customers?  What happens to employment contracts  What happens to directors?  Duties of receiver

 Liquidation  What is it?  Who can request liquidation  Petition by company  Petition by creditors  Petition by contributory  Petition by Registrar  Petition by Financial Secretary  Petition by Official Receiver  Grounds for winding up  Inability to pay debt  Company fraudulent from the beginning  Process of winding up  Public Examination

4 EXAMINATION IN HK COMPANY LAW

There will be five questions covering each of the topics in the week

There 5 questions will consist of

Theory questions relating to case law and also the legislation, and

Case studies of a factual situation where you are asked to advise the client of his position.