Articles of Association for Hong Kong companies
7 minute read
If you’re thinking about setting up a company in Hong Kong and want to be compliant with the law, you need to know how to go through the official registration process.
According to the old Company Ordinance, a registered business needed to have the Company Articles of Association and Memorandum of Association. Now, a New Ordinance has been enforced and under it, the Hong Kong government has abolished the Memorandum of Association.
Currently, the primary document for registration for all Hong Kong companies is the Articles of Association – and here is everything you need to know about it.
Overview:
What are the Articles of Association?
The Articles of Association, also known as simply the AOA, is a document that describes a company’s purpose and specifies all of the regulations for the operations it undertakes.
It needs to outline all of the tasks the Hong Kong company undertakes and how they need to be accomplished within the entire organization. This includes the preparation and management of the business’s financial records as well as the appointing directors.
This is an essential document for any company. Think of a business’s Association Articles as a user’s manual for the general public.
In it, anyone can find out information such as:
- What the company is all about
- The functions that the company performs
- How the company pays its dividends and its audit financial records
- Whether or not the company has any initial shareholdings and if it has the power of voting rights
Does a company need articles of association?
In short, yes! As mentioned, the old Companies Ordinance stated that a Hong Kong company needed to have both the Memorandum of Association and the Articles of Association.
Under the new Companies Ordinance, businesses are only required to have the Articles of Association. These are mandatory articles, with no exceptions.
What goes into the contents of the Articles of Association?
Many business owners wonder what goes into their Articles of Association. There are five different components to a company’s Association Articles.
Company name
Every Hong Kong Company needs an official company name that must be present in the AOA. There are certain rules regarding company names that differ from jurisdiction to jurisdiction, so you should check which company name you can use legally in Hong Kong.
Purpose of the company
Every company has a specific purpose and a reason as to why it was incorporated. It’s mandatory to state your business’ purpose which will showcase the value that your company can deliver to society. In some jurisdictions, you can state a broad purpose statement while in others, a more in-depth description is required.
Share capital
In all Articles of Association, a company needs to state the type and number of shares held that comprise its capital. There is usually at least one type of common share that makes up a company’s capital but there may also be multiple types of preferred stock.
Organization of the company
There are a few pieces of legal information you need to include about your company in the document. This includes the number of directors and employees who work there, the registration address, and the identity of all the founders as well as the original shareholders.
Depending on the type of business you own and the jurisdiction it’s in, this can also include information about your legal advisors’ auditors.
Shareholder meetings
The Articles of Association document has a shareholders meetings section in which you will need to list information on the first general meeting of shareholders’ provisions. This includes details on the resolutions, notices, and votes of all shareholder meetings.
Every governing subsequent annual general meeting will also need to be detailed here.
Which companies are required to file Articles of Association?
The following entities are required to have their articles registered:
- Unlimited companies. The exact number of employees of the unlimited company needs to be included as well as the specified amount of share capital they have, and the company’s assets.
- A company limited by guarantee. In the document, you need to specify how many members will be registered with the company./li>
- Private companies limited by shares. The document has to include the provision for restricting any transfers of shares of the limited company. It also needs to have a clause that prohibits the invitation to the public to purchase shares in the form of debentures and stocks, and a limit of 50 members.
How to file Articles of Association?
Aside from submitting an Articles of Association document when you register a Hong Kong company, you also need the incorporation form NNC1.
he Financial Company Secretary is empowered by the new CO which prescribes appropriate Model Articles that replace tables A and C from the First Schedule of the Old Ordinance.
Companies that are limited by shares (both private and public companies limited) and those limited by guarantee are prescribed Model Articles by the Companies Notice.
A company can adopt any or all of the provisions that are appropriate to their type of company in addition to the already existing mandatory company’s articles.
Need help filing your AoA or other important documents? We offer corporate secretary services to help manage these operations for you!
How to update Articles of Association?
Most companies want to update their Articles of Association, and this is a common occurrence. Most of the time, it’s to fulfill their operation needs or meet their investors’ wishes and preferences. To alter or update an article in their AOA, a company needs to go to the Hong Kong companies’ registry and fill out form NAA1.
If this is something you want to do, you need to take a look at section 88 of the Companies Ordinance. Depending on the subject matter you want to be altered, you will need to have either an ordinary resolution or a special resolution.
Company owners are required to deliver their proper notice with the correct resolution to the Hong Kong company registry within 15 days. If a company is not compliant with these requirements, they will be liable to a level 3 fine and get a penalty of HK$300 per day until the issue is resolved.
Aside from altering certain clauses of the Articles of Association, business owners can also choose to change their company’s objection. You can restrict or abandon your current objective and adopt a new one.
To do this, you need to check the requirements which are listed in the Companies Ordinance under section 89. Then, you need to submit a filled-out NAA2 form as well as your resolution and a certified true copy of your altered Articles to the Hong Kong Company Registry.
What are the new rules under the New Ordinance?
The New Companies Ordinance of Hong Kong strives to establish better regulations within organizations, enhance corporate governance, update the law governing businesses, and promote them.
The Old Memorandum of the Company Ordinance was abolished because it contained two pieces of information that are no longer relevant in today’s corporate capacity.
If you have been a Hong Kong business owner while the old CO was still valid, you won’t have to change the information fully. All you need to do is update the relevant information in your Articles of Association and inform all relevant shareholders and members of the changes.
What is the difference between AOA and MOA?
If you’re confused about the difference between the Memorandum of Association and Articles of Association, here are the most important ones:
- All of the information in an MOA is fundamental and required for company incorporation. On the other hand, the information in an AOA represents the rules of a company.
- MOAs contain a company’s powers and objectives while AOAs contain the rules of a company.
- MAS can’t be amended retrospectively while AOAs can.
- MOAs are obligatory for your and any other company while AOAs are only obligatory for the types of businesses we listed above.
- An MOA is subordinate to the Companies Act like the AOA is subordinate to the memorandum.
Wrap up
One of the reasons why there are so many business registrations in Hong Kong is that the government has made the registration process so simple that almost anyone can register a legal organization.
While it may seem complicated at first, the Articles of Association and all of its forms are easy to understand and are there to help your company stay compliant and follow the most important rules.
If you want to make the process of filing your AOA simpler, you can get help from Sleek’s incorporation services who have helped many public companies and their members. We’ll be glad to help you on your business journey.
