FINANCIAL AND MONETARY AFFAIRS
Since 1993, the Companies Registry has operated as a trading fund department. As a trading fund, the Registry can keep most of its income and apply it flexibly, having regard to its needs, business turnover and its customers' demands and expectations. Although the economic downturn since the second half of 1997-98 had an impact on the demand for its services and revenue, the Registry managed to maintain a healthy financial position. The profit retained for the financial year ending on March 31, 1999, amounted to $51 million. By deferring a fee increase again for 1999-2000, the Registry eased the burden on the business community but, despite this, development work on improvement projects has continued.
During the year, the Registry continued to improve the quality of services delivered. With effect from April 1, the target response time for processing applications for change of company name was reduced from 12 to 10 working days. The statistics section of the Registry's home page on the Internet was expanded in July to include. additional types of statistics while the part on liquidations was linked to the web site of the Official Receiver's Office so that visitors can have direct access to the figures of both voluntary and compulsory liquidations. In addition, the pre-1988 old and dissolved company names were restored to the computerised index. Since the Registry intensified prosecution action against those companies and their directors who failed to file annual returns on time with effect from April 1998, the compliance rate of filing annual returns by companies had improved from 72 to 78 per cent of the total number of registered companies at the end of March.
One of the Registry's principal aims is to enable customers to search the Registry's database of company information without having to physically visit the department. With the completion of a major exercise to expand the Registry's computerised database, the department will introduce in 2000 the Companies Registry On-line Public Search System (CROPS) which will enable customers to have direct on-line access to key updated company information in their own offices. Furthermore, the Registry commenced a Strategic Change Plan Study in October 1998 to fully computerise its operations by 2005. The Study Team issued an Interim Report in May 1999 summarising the progress of the study together with preliminary proposals on process re-engineering, electronic filing and document imaging. A final report will be issued to the Financial Services Bureau in June 2000. Full computerisation will considerably enhance the efficiency and cost-effectiveness of the Registry's operations and the quality of facilities and services offered to the department's customers.
The Standing Committee on Company Law Reform, established in 1984, continued to meet regularly to consider amendments to the Companies Ordinance, consistent with the needs of the public and the commercial sectors. The Consultancy Report on the overall review of the Companies Ordinance was launched for public consultation in May 1997 and 28 written submissions were received. The committee is considering the report's recommendations and the public comments, and is expected to submit its own report on the reform of Hong Kong's company law in early 2000.
The Companies (Amendment) Ordinance 1999, which came into operation on November 11, introduced a new statutory procedure to deregister solvent defunct private companies. The ordinance also introduced changes to provide for merger relief, streamlining the reporting of the directors' particulars and other provisions to reduce the burden of compliance and better assist the general public.
In 1999, 35 560 new companies were incorporated. On incorporation under the Companies Ordinance, a local company pays a registration fee of $1,425 and a
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