Resources

What are Articles of Association in Hong Kong and why is it important?

Last updated: March 2024

Hong Kong is attractive for business both for locals as well as foreign companies and entrepreneurs. However, starting a company there means following specific rules and requirements. One crucial rule is having Articles of Association, a necessary document for every company.

Articles of Association sets the internal rules and structure for how the business operates within Hong Kong’s laws. Essentially, it outlines how your company will be managed. These rules are governed by the Companies Ordinance and overseen by the Hong Kong Companies Registry. This article explains what they are, why they’re important, and how they’ve changed under the new Companies Ordinance.

What Are Articles of Association in Hong Kong?

Articles of Association in Hong Kong are legal documents that define the rules and regulations for the internal management and operation of a company. They typically outline the rights, duties, and powers of the company’s directors, shareholders, and officers. The Articles of Association (AoA) serve as the fundamental rulebook for the internal operation of a Hong Kong company. It’s a legally binding document that complements the larger framework of the Hong Kong Companies Ordinance.

These articles of association cover various aspects such as the distribution of dividends, appointment of directors, issuance of shares, voting rights, and conduct of meetings. Articles of Association are a crucial part of the company’s constitution and are filed with the Hong Kong Companies Registry during the company formation process. They provide clarity and guidance on how the company will function and govern its affairs throughout its existence.

Previously, when a new company formed, it had to create both Articles of Association and Memorandum of Association as per the Companies Ordinance. Since some details were repeated in both documents, the Memorandum was removed. Now, under the new Companies Ordinance, only the company's Articles of Association are needed.

While Hong Kong provides a standard template for Articles of Association, companies can customize provisions to address their specific needs and structure.

The Articles of Association typically define:

The company’s name and form (i.e., limited by shares)
Share capital structure and the rights attached to different classes of shares
Procedures for issuing and transferring shares
Responsibilities and powers of directors
Rules for holding shareholder meetings and making decisions
Dividend distribution policies
Dispute resolution processes
Procedure for winding-up the company, if necessary

What has changed with the new companies ordinance?

The New Companies Ordinance (Cap. 622) implemented in Hong Kong since March 3, 2014, mandates Articles of Association (AA) for all companies.

Previously, newly formed companies were obligated to prepare both Articles of Association and Memorandum of Association. However, to eliminate duplication of information, the Memorandum of Association was abolished. As a result, under the new Companies Ordinance, only the company’s Articles of Association are now necessary, streamlining the incorporation process and reducing administrative burden.

Further, major reforms include introducing a no-par value regime for shares, and enhancing corporate governance. The ordinance modernized language, streamlined deregistration and winding-up processes, and codified directors’ responsibilities. It aimed to improve business ease, corporate governance standards, and combat misuse of companies. These changes promote a friendlier business environment, align with global best practices, and enhance transparency, ultimately boosting investor confidence and modernizing Hong Kong’s company law framework.

Key Points to Remember

Companies Registry: Your Articles of Association must be filed with the Hong Kong Companies Registry when registering a new company.
Review and Updates: It’s vital to review and update the Articles of Association periodically to reflect changes within the company, such as alterations to share structure or operational procedures.
Best Practices: It’s advisable to seek guidance from a legal or corporate services professional in Hong Kong to ensure your Articles of Association are well-written, legally compliant, and tailored to your business.

Looking to start a Hong Kong company? Book a time with our experts.

What Are the Legal Requirements for Articles of Association?

Here’s a breakdown of the legal requirements for Articles of Association (AoA) in Hong Kong, along with some important considerations:

Mandatory Existence: Every company incorporated in Hong Kong must have a registered Articles of Association, filed with the Companies Registry.
Minimum Content: The Articles of Association must, at a minimum, specify:
- Company name
- Company type (e.g., limited by shares)
- Whether the liability of members is limited
Optional Provisions: Beyond the minimum content, companies can tailor their Articles of Association based on specific needs.
No Contradiction of Law: The Articles of Association cannot contain provisions that violate the Companies Ordinance or other relevant Hong Kong laws.
Consistency: The Articles of Association provisions should be internally consistent and not contradict each other.
Clarity and Specificity: The Articles of Association should be clear and unambiguous to avoid misinterpretation and minimize later disputes.
Alignment with Business Needs: Your Articles of Association should be thoughtfully drafted to suit your company’s specific structure, size, and operational requirements.

Hong Kong provides model articles. Companies can choose to adopt all, some, or none of these provisions, allowing for customization.

Which companies must have Articles of Association under the New Companies Ordinance?

Under the New Companies Ordinance, all companies incorporated in Hong Kong are mandated to have Articles of Association (AoA).

The most common type of company formed in Hong Kong is a Private Limited Company. In many companies where members have shares, their liability is linked to the number of shares they own. This should be mentioned in the company’s rules. Also, as a private company, the general public cannot buy shares through bonds or stocks. In contrast, other companies, such as public companies with shares, can do so.

Download articles of association for Private Limited Company here
Download Model articles for Private company here
Model Articles Of Association For Companies Limited By Guarantee here

How to register the Articles of Association?

To register for Articles of Association in Hong Kong, you typically follow these steps:

Draft Articles: Prepare the Articles of Association outlining the internal rules and regulations of your company.
Company Registration: Register your company with the Companies Registry of Hong Kong.
Submission: Submit the Articles of Association along with other required documents to the Companies Registry.
Approval: Await approval from the Companies Registry. Once approved, your company will be officially registered.
Compliance: Ensure compliance with any additional regulations or requirements specific to your business activity.
Record Keeping: Keep copies of the Articles of Association and other incorporation documents for future reference.
Amendments: Make amendments to the Articles of Association as necessary, following proper procedures and legal requirements.

It’s advisable to seek professional guidance or consult with a company formation service to ensure compliance with all legal requirements and procedures.

Looking to start a Hong Kong business? Speak to our company registration experts today.

Can the Articles of Association Be Changed?

Yes, the Articles of Association can be changed. This typically requires passing a special resolution by the shareholders in a general meeting. It’s important for companies to follow the legal requirements and procedures set out in the relevant company law and their own Articles when making amendments.

Typically in Hong Kong, changing the Articles of Association is common and easy.
You need to fill out the NAA1 form at the Hong Kong Company Registry. Depending on the changes you want to make, you may need a special or ordinary resolution as per section 88 of the Companies Ordinance.
After deciding on the changes, you must submit a notice and resolution to the Company Registry within 15 days. Not following these rules can result in fines.
You can also change your company’s objectives by following section 89 of the Companies Ordinance. Use the NAA2 form to submit the resolution and a certified true copy of the amended Articles to the Registry. The certification can be done by a licensed solicitor, CPA, or Chartered Secretary in Hong Kong.

Frequently asked questions

What is the purpose of the Articles of Association?

The Articles of Association outline the internal rules and governance structure of a company, guiding how it operates within Hong Kong’s legal framework.

Are the Articles of Association mandatory for all companies in Hong Kong?

Yes, every company incorporated in Hong Kong is required to have Articles of Association. It’s a legal requirement under the Companies Ordinance.

Can the Articles of Association be amended?

Yes, the Articles of Association can be changed to adapt to the evolving needs of the company. Amendments require following specific procedures outlined in the Companies Ordinance and submitting necessary forms to the Hong Kong Company Registry.

What happens if a company fails to comply with the requirements regarding Articles of Association?

Non-compliance with the requirements regarding the Articles of Association can result in penalties, including fines and daily penalties, as stipulated by Hong Kong law.

Can I customize the Articles of Association to suit my company's specific needs?

Yes, the Articles of Association can be customized to reflect the unique requirements and preferences of the company. However, certain provisions must comply with the legal framework established by the Companies Ordinance.

Are Articles of Association public documents in Hong Kong?

Yes, Articles of Association are public documents in Hong Kong. Once filed with the Companies Registry, they become accessible for public inspection. This is part of the transparency and compliance requirements under the Hong Kong Companies Ordinance.

Author

Liam Thomas

Country Head of Hong Kong SAR at Sleek

Liam brings extensive expertise in addressing the challenges encountered by entrepreneurs and small to medium-sized enterprises, particularly in the fintech and payments sectors. With a wealth of experience spanning the UK, Singapore, China, Australia, and Hong Kong SAR, Liam offers global insights and strategic guidance to drive business success.

Need more information? Let our experts help.