9.
Report on company law reform submitted
The Standing Committee on Company Law Reform has submitted its Eleventh Report, covering the year 1994, to the Governor-in-Council.
The Standing Committee is tasked to advise the Financial Secretary on necessary amendments to the Companies Ordinance, the Securities Ordinance, and the Protection of Investors Ordinance. A total of 17 issues, six of which involved amendments to the relevant legislation, had been considered in the past year.
Among the legislative amendments recommended are the proposals to confer preferential payments to small depositors in the event of a bank liquidation; to allow the use of either Chinese or English under the various provisions of the Companies Ordinance; and to issue pre-signed certificates of incorporation by the Registrar of Companies.
These changes are contained in the Companies (Amendment) Ordinance 1995 which was passed into law on July 26.
Other legislative amendments recommended include the proposals to adopt the 1985 UK legislation so that anyone who wished to claim compensation with regard to the issue of shares or securities by an issuing company could do so without having to first rescind their ownership of the shares or securities to which listing related; to abolish certain accounting exemptions enjoyed by shipping companies; and to raise the amounts from $1,000 to $10,000 of charitable and other donations a company and its subsidiaries should be entitled to make.
Legislative amendments are being prepared to bring about these changes in the 95-96 legislative session.
The Standing Committee also recommended that no change should be made to the existing audit requirement of accounts for all 'small' companies notwithstanding the recent legislative changes brought about in the UK which exempted such companies from the obligation.
The Standing Committee also recommended that no legislative change should be effected on the registration of company charges.