Corporate & Commercial

It is possible to set up the following types of companies in Hong Kong:

• Private companies limited by shares;
• Public companies limited by shares;
• Companies limited by guarantee without a share capital;
• Private unlimited companies with a share capital; and
• Public unlimited companies with a share capital.

When you set up a new company, you need to consider the company type, company name and company structure. Our experienced lawyers can assist you in selecting a suitable company type; advising you on the company name availability, the company structure, the license or permit required for your business and the maintenance requirements; and preparing the specially designed articles of association and the shareholders’ agreement to protect your interest. Upon receipt of all relevant information and signed documents, it normally takes about 4-5 working days to incorporate a company limited by shares.

There is no restriction on residency or nationality for a director and, unless the articles of association otherwise require, there is no requirement for a director to be a shareholder. A director who is a natural person must be at least 18 years old. An undischarged bankrupt is prohibited from acting as a director without the leave of the court. A person against whom a disqualification order has been made is also prohibited from acting as a director. The articles of association also commonly provide that a director must not be of unsound mind.

The Company may not appoint a corporate director unless it is not a member of a corporate group containing a listed company and it has at least 1 director who is natural person.

There is no restriction on residency or nationality for a shareholder. A shareholder may be a natural person or a body corporate. However, subject to certain exceptions, a body corporate cannot be a shareholder of the company which is its holding company. A shareholder who is a natural person must be at least 18 years old. A director and shareholder can be the same or different person.

• Unlike the articles of association which is a public document and can be searched and obtained for a fee by anyone, a shareholders’ agreement is not required to be filed at the Companies Registry. There can be matters between the shareholders that they do not wish to disclose to the public.
• Where the company is a party to the shareholders’ agreement, it is possible to place the company under obligations. Examples include supervision over subsidiaries, provision of certain documents and information to shareholders, and recognition of beneficial owners’ rights over shares.
• A shareholders’ agreement can be an effective instrument for minority protection. The articles of association can be altered by special resolution whereas the shareholders’ agreement can only be altered with unanimous consent.
• A shareholders’ agreement can provide more detailed terms on corporate governance. Example includes power given to certain shareholders to replace the company’s executives.
• A shareholders’ agreement is an ordinary contract and the full range of ordinary contractual remedies are available in case of a breach.

If a company fails to deliver documents to the Registrar of Companies for registration or to comply with the requirements of the Companies Ordinance, the company and every responsible person of the company, including every director, company secretary and manager of the company, are liable to prosecution and, if convicted, default fines.

A charity wishing to enjoy the tax exemption should complete an application form and provide the documents specified therein to the Inland Revenue Department (“IRD”). The charity must be established for exclusively charitable purposes for public benefit. In determining whether an institution is established or carried on for charitable purposes, the IRD will consider not only to the stated objects of the institution, but also to the activities which have been, are being or will be carried out by the institution.

We advise our clients every day on commercial contracts. Our relentless efforts to understand your business and goals provides advice that are practical and reflect commercial reality. We have a wealth of experience advising on a wide range of commercial contracts, including distribution and agency agreements, franchise agreements, joint venture agreements, manufacturing agreements, confidentiality agreements, authorized retailer agreements, consignment and sale agreements, consultancy agreements, etc.

Private merger and acquisition transactions in Hong Kong are typically structured as either share purchases or asset purchases. Public merger and acquisition transactions in Hong Kong usually take the form of a takeover offer or a scheme of arrangement. Generally, the major steps in a merger and acquisition transaction are: (i) considering the deal structure, (ii) negotiations, (iii) entering into a non-disclosure agreement, an exclusivity agreement and a letter of intent, (iv) conducting due diligence, (iv) entering into a sale and purchase agreement, (v) attending closing matters and (vi) attending post-closing matters.

Cross border transactional matters are an integral part of our firm’s activities. We have considerable experience in instructing local counsel, coordinating multi-jurisdictional legal advice in transactions involving/not involving Hong Kong, and offering a single point of contact and integrated legal solutions to the clients.

The Main Board provides a platform for established companies that fulfill specified profit and/or market capitalisation requirements, along with other financial standards requirements, to raise fund in the market. On the other hand, GEM offers a similar platform but with more relaxed listing requirements while maintaining comparable continuing obligations, making it a suitable choice for small to mid-sized companies.

Yes, issuers with both individual and corporate beneficiaries of WVR are eligible for listing. However, the issuers must be an innovative company and must meet the requirements outlined in Chapter 8A of the Listing Rules.

In addition to Chapter 18A, Guidance Letter HKEX-GL89-16 provides the criteria for determining whether a Regulated Product (such as small molecule drugs, biologics, and medical devices) has developed beyond the concept stage.

A non-exhaustive list of sectors acceptable for such listing is provided in the Guidance Letter HKEX-GL115-23 which includes next-generation information technology, new food and agriculture technologies, advanced hardware and software, advanced materials, and new energy and environmental protection.

A sponsor plays an important role in an IPO. Sponsors provide guidance to a company through its IPO stage. Sponsors are subject to various duties under Listing Rule 3A.11 such as making sure that all requirements of the Listing Rules are met by conducting reasonable due diligence and assisting in the preparation of listing documents.