Some photographs in this study report are provided by the Public Records Office of the Government Records Service, Hong Kong Special Administrative Region. Study Report on History of Company Incorporation in Hong Kong - A Study Commissioned by the Companies Registry, Hong Kong Special Administrative Region by S. H. Goo Professor of Law Director, Asian Institute of International Financial Law University of Hong Kong1 July 2013 Acknowledgements 1 I would like to thank the Companies Registry (in particular the Registrar of Companies, Ms Ada LL Chung and her staff, Miss Peggy LF Lau, Miss Hilda HM Chang, Miss Ivy MS Poon and Mr Roger HW Wong) and Professor Edward Tyler, Senior Assistant Law Officer (Civil Law) at the Department of Justice for the assistance rendered in pursuing the research and their helpful comments on earlier drafts, and Dr Hong Xiangxing for conducting the research and drafting the report. Thanks are also due to Miss Jiang Zixuan, Miss Peng Ying, and Miss Karen Lau Can for compiling the data. About the Companies Registry he Companies Registry (“the Registry”) With the introduction of the one-stop electronic T administers and enforces the provisions of company incorporation and business registration the Companies Ordinance and related ordinances. service at the e-Registry portal (www.eregistry. The Registry registers local and non-Hong Kong gov.hk) in March 2011, an electronic Certificate of companies and documents required to be filed under Incorporation and Business Registration Certificate the Companies Ordinance and related ordinances; can normally be issued in one go in less than an hour de-registers defunct solvent private companies after receipt of an application. In February 2012, the and provides the public with services and facilities Registry extended its e-Filing services to include the for inspecting and obtaining company information submission of specified forms for reporting changes of kept by the Registry. The Registry also advises the company information (including changes of registered Government on policy, regulatory and legislative office address, directors/company secretaries and issues regarding company law and related legislation, their particulars and share capital). The electronic corporate governance and other matters affecting the service for submission of annual returns for local commercial sector. private companies and the Annual Return e-Reminder Service have been available since August 2012. The Registry has always been fully committed to providing efficient, quality and cost-effective The new Companies Ordinance was passed by the services to customers. In late February 2005, the Legislative Council on 12 July 2012. It modernises Registry implemented the Integrated Companies the legal framework for the operation of companies Registry Information System which transformed its in Hong Kong, thereby increases Hong Kong’s core business activities and enabled the delivery of competitiveness as an international business and 24x7 electronic search services through the Cyber financial centre. The implementation of the new Search Centre (www.icris.cr.gov.hk). The online search Companies Ordinance will entail a number of new services have been well received by customers and roles and functions for the Registry. The new more than 99 per cent of all company searches Companies Ordinance will commence operation are conducted online. The roll-out of the company in 2014. search mobile service (www.mobile-cr.gov.hk) in June 2012 marks another milestone in the technological enhancement of the Registry’s services. Foreword Celebrating the 20th Anniversary of the Companies Registry Charting a New Course he year 2013 marks the 20th Anniversary of the e-Monitor, e-Reminder and e-Filing services at the T establishment of the Companies Registry. To e-Registry portal, the roll-out of Company Search celebrate two decades of growth and achievements, Mobile Service and, most recently, the enactment of it is high time that we review the history of company the new Companies Ordinance. These achievements incorporation in Hong Kong since the enactment transformed the company incorporation and of the first Companies Ordinance in 1865 and registration processes and, more importantly, the the development of the Companies Registry over corporate regulatory regime in Hong Kong. the years. Prior to the enactment of the Companies Ordinance The administration of the registration of companies 1865, the operation of companies that were in Hong Kong dates back to 1865 when the first incorporated elsewhere and established their offices Companies Ordinance was enacted. A Companies in Hong Kong were governed by British law. The Registry was established pursuant to the provisions development of company law in Hong Kong during the of the Companies Ordinance 1865 and it was then period from 1865 to 1948 was marked by a series of administered by the Registrar of the Supreme Court. amendments to the rules relating to the registration With the establishment of the office of the Registrar of companies, alteration of a company‘s objects and General under the Registrar General (Establishment) the requirement for a minimum number of persons to Ordinance in 1949, the functions of the Companies form a private company. In the 1950s and 1960s, the Registry were transferred from the Supreme number of companies in Hong Kong rapidly increased Court to the Registrar General’s Department. The and therefore it was of vital importance to review Companies Registry was eventually established as an the company legislation. To this end, a Companies independent government department on 1 May 1993 Law Revision Committee was set up in 1962 that with the Companies Registry trading fund established carried out a painstaking legislative review process on 1 August in the same year. The Companies leading to the introduction of a series of Companies Registry then became one of the pioneer trading fund (Amendment) Bills and finally the Companies government departments. (Amendment) Ordinance 1984. Over the past two decades, the Companies Registry Hong Kong had established itself as a major has undergone substantial changes in its operation industrial and commercial centre by the 1980s and and the delivery of its services. The more remarkable the number of companies incorporated in Hong Kong ones include the implementation of the Integrated was constantly on the rise. In 1984 the Standing Companies Registry Information System (ICRIS), Committee on Company Law Reform (SCCLR) was set provision of round-the-clock e-Search Services at up to review the Companies Ordinance on a regular the Cyber Search Centre and the e-incorporation, basis in order to update its content, with the aim of enhancing Hong Kong’s corporate governance The Companies Registry strives to provide efficient, regime and ensuring that the Ordinance satisfies the high quality and effective services to the public. The changing needs of the local business environment. e-incorporation service, launched at the e-Registry A thorough review of the Companies Ordinance in March 2011, enables users to complete the one- was called for in 1994, which resulted in a number stop company incorporation and business registration of amendments to the Companies Ordinance in the procedures online within an hour. subsequent years. In World Bank’s Doing Business 2013 Report, Hong A comprehensive exercise to rewrite the Companies Kong was ranked sixth on “Starting a Business” and Ordinance was launched in mid-2006. The main this has contributed to Hong Kong’s overall ranking objectives of the new Companies Ordinance, which as the second best in the world on ease of doing was passed by the Legislative Council on 12 July business. I am glad that our efforts have been 2012, are to enhance corporate governance, ensure recognised both locally and internationally. We will better regulation, facilitate business and modernise enter a new era when an updated and modernised the law with a view to strengthening Hong Kong’s Companies Ordinance comes into operation next year. competitiveness as a corporate domicile and We will continue to work tirelessly to ensure that the enhancing its status as a major international business services provided by the Companies Registry in Hong and financial centre. The implementation of the new Kong remain on a par with the world’s first-class Companies Ordinance in 2014 will open a new chapter registries, and reinforce Hong Kong’s position as a in the development of company law in Hong Kong. world-class place to do business. This year marks not only the 20th Anniversary of I would like to express my heartfelt thanks to the Companies Registry, but also witnesses the Professor Say Goo and his team for their time and over 100th Anniversary of 32 centenary companies professional assistance in preparing this report. that were incorporated in Hong Kong before 1 I hope that you will find the report informative and January 1913 and are still in operation. The number interesting. of companies incorporated in Hong Kong has been growing throughout the years in line with its economic development. By the end of March 2013, Ms Ada LL Chung, JP the total number of live local companies registered Registrar of Companies under the Companies Ordinance surpassed one Companies Registry million, to stand at 1,067,434. The number of local July 2013 companies newly registered with the Companies Registry in 2012-13 also hit a record high of 162,777. Table of contents 6 I. Introduction 10 II. Evolution of the legal framework for company incorporation 38 III. Authorities or departments responsible for the administration of the Companies Ordinance and the registration of companies and documents 40 IV. Analysis of statistics of companies incorporated 1. Correlation between the number of companies incorporated and GDP 2. Statistics of company incorporations (1865-2012) 3. The first ten local companies which appear on the records of the Companies Registry 4. Notable examples of companies with a long history still operating in Hong Kong 5.