1

Hong Kong Experience Hong Kong Experience in Corporate Law in Corporate Law

AdministrationAdministration

Ms Ada ChungMs Ada ChungRegistrar of CompaniesRegistrar of Companies

1 April 20091 April 2009

2

The Companies Registry of Hong Kong

Number of companies on register (as at 28.2.2009):

Hong Kong companies – 716,058

Non-Hong Kong companies – 8,504

Staff – 278 permanent staff

& 61 contract staff

3

The Companies Registry of Hong Kong (2)

Operating Revenue Profile in 2007-08(Total revenue - HK$366 Million)

AnnualRegistration

($89M)

Incorporation($174M)

Searches andCopying ($49M)

Others ($35M)

ChargesRegistration

($19M)

4

Financial Tsunami (1)

Some measures to alleviate the impact of the financial tsunami

Review of prosecution policy

Compound offences

Redeployment of staff

5

Financial Tsunami (2) – Review of Prosecution Policy

Prosecution policy reviewed in late 2008.

A pilot scheme on issuing ‘Notices to File’ was implemented to encourage filing of annual returns before prosecution.

Defaulting companies are allowed 28 days from the dates of the Notices to remedy their defaults.

Summonses will only be issued for prosecution if annual returns still remain outstanding.

6

Financial Tsunami (3) – Compound Offences

Consideration is now being given to amend the Companies Ordinance to enable the Registrar of Companies to compound offences to:

Encourage companies to file outstanding returns

Reduce compliance costs

7

Financial Tsunami (4) – Redeployment of Staff

A trading fund department being a considerate employer

Striving to retain staff by:

initiating special projects to enhance integrity of the register

flexibly redeploying staff across different operation sections to optimise the productivity of all operation sections

8

Recent Major Improvement Initiatives (1)

Implementation of Phase I of the Integrated Companies Registry Information System (ICRIS)

New filing requirements for non-Hong Kong companies

Shortening the time for processing incorporation documents

Streamlining incorporation requirements

One-stop service for company incorporation and business registration

9

Recent Major Improvement Initiatives (2) - Implementation of ICRIS

Phase I of ICRIS was implemented on 28 February 2005:

Paperless document processing workflow

Online search services

Improved efficiency and staff productivity

Shorter document processing time

Higher customer satisfaction

10

Recent Major Improvement Initiatives (3) – New Filing Requirements for Non-Hong Kong Companies

Annual returns of non-Hong Kong companies

Relevant provision – section 334 of the Companies Ordinance

Deliver an annual return for registration within 42 days after each anniversary of the date of registration of the company

Escalating registration fee - HK$180 up to HK$4,800

11

Recent Major Improvement Initiatives (4) – New Filing Requirements for Non-Hong Kong Companies

Compliance rate on filing of annual returns by non-Hong Kong companies

64.96%71.23%

87.12%

0%

20%

40%

60%

80%

100%

2006 2007 2008

12

Recent Major Improvement Initiatives (5) – Shortening the Time for Processing Incorporation Documents Position mentioned in the Doing Business Report 2009 -

7days for incorporation at the Companies Registry

The time for processing incorporation documents of Hong Kong companies was shortened with effect from 2 January 2008 as a result of streamlining of operation procedures and redeployment of resources:

6 working days

4 working days4 working days

13

Recent Major Improvement Initiatives (6) – Streamlining Incorporation Requirements

After the introduction of a new incorporation form, newly incorporated companies are no longer required to file separate notifications on essential company particulars after incorporation since 11 July 2008

Impact on “Starting a Business” in the Doing Business Report

The number of steps has been reduced from 5 to 4

With the removal of the step, the overall time for “Starting a Business” has also been reduced by 1 day

14

Recent Major Improvement Initiatives (7) – One-stop Service for Company Incorporation and Business Registration

Establishment of a Receipt and Despatch Counter of the Business Registration Office in the Companies Registry on 1 December 2008

15

The Path Ahead

Phase II of ICRIS – online incorporation and document filing

Further integration of company incorporation and business registration processes online

Rewrite of Companies Ordinance

16

Rewrite of the Companies Ordinance (“CO”)

Some major proposals

Codification of directors’ duties – No!

Retain corporate directors for private companies

New business review for directors’ report

Abolition of par value

Simplified accounts

17

Website

Companies Registry

http://www.cr.gov.hk

18

Thank you !Thank you !