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Interal Management of
a Hong Kong Company
Directors and Board Meetings
Responsibility for the overall management of a Hong Kong
company typically rests with its board of directors. Generally,
the board authorises the actions of the company through board
resolutions passed at board meetings or, if authorised by
the articles, by written resolution signed by all the directors
or a stated proportion of them.
There is no requirement
that board meetings be held in Hong Kong or at any specific
intervals. Normally, reasonable notice of meetings must be
given to each director, but the Articles of Association can
modify this general obligation. The board of directors may
delegate its powers to certain persons. A certain degree of
delegation is, so far as third parties dealing with the company
are concerned, normally implied in the case of managing directors
and senior employees of a company.
Shareholders and Shareholder Meetings
Certain decisions however must, by law, be made or sanctioned
by the shareholders in general meeting. This is done by the
passing of an ordinary or, in some cases, a special resolution.
Such resolutions may be proposed as special business at annual
general meetings or at separately convened meetings, called
extraordinary general meetings.
An ordinary resolution requires a simple majority of the
shareholders who attend and vote at a meeting to approve it.
A special resolution, on the other hand, requires a 75% majority
of the shareholders who attend and vote at a meeting to approve
it.
Generally, 14 clear days’ notice is required for a meeting
at which an ordinary resolution is proposed and 21 clear days’
notice is required for a meeting at which a special resolution
is proposed or for the holding of an annual general meeting.
A majority in number of shareholders having the right to attend
and vote at general meetings who together hold not less than
95% in nominal value of all the shares, or all the shareholders
in the case of an annual general meeting, may agree that a
meeting be held at short notice.
The Articles of Association should make provision for the
quorum and voting rights and will determine whether or not
the chairman of the meeting has a casting vote. There is a
statutory right on the part of a shareholder to appoint a
proxy to attend and vote on his or her behalf at any meeting
at which the shareholder is entitled to attend and vote. A
statement to this effect must be included in the notice of
each general meeting. A proxy need not be a member and will
have the same right to speak at the meeting as his or her
appointor. A corporation which is a member can attend a meeting
by appointing a representative to attend the meeting on its
behalf. Such a representative can speak and vote on a show
of hands or on a poll. A proxy’s rights to vote are
limited to voting on a poll unless the Articles provide otherwise.
It is usually necessary to lodge appointments of proxies (but
not of corporate representatives) in advance of the meeting.
A Hong Kong company’s Articles of Association will usually permit
resolutions to be passed by a written resolution signed by
all the shareholders, without the need to hold a meeting,
however notice of written resolutions must be provided to
the auditors at or before the time of submission to members
for signature. (Every company must hold a general meeting
as its annual general meeting each year. This may not be done
by written resolution.)
Single Member Company
Where a private company only has one shareholder and that shareholder takes a decision that may be taken in a shareholder’ meeting, the decision shall be evidenced by a written resolution or a written record of the decision which must be delivered to the company within 7 days of the decision having been made.
For further information, please contact us or send email to info@bycpa.com.
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