Amalgamation support in Hong Kong.
Looking to cut administration costs and streamline your Hong Kong corporate structure? A court-free amalgamation process in Hong Kong may be the answer.
What is a amalgamation?
Amalgamation is the legal process by which the property, liabilities, and undertakings of two or more companies merge and be succeeded by a single surviving company. Each amalgamating companies will cease to exist as separate entities, and their shareholders will become the shareholders of the amalgamated company on the effective date.
The Hong Kong Companies Ordinance provides a court-free regime for amalgamations of wholly-owned intra-group Hong Kong companies. An amalgamation may either be vertical (i.e. between a holding company and one or more of its wholly-owned subsidiaries) or horizontal (i.e. between two or more subsidiaries of the same holding company).
Benefits of
amalgamating companies.
Amalgamation is a relatively convenient and easy way to streamline corporate structure, to achieve an efficient allocation of resources, and to serve tax planning purposes.
Steps of amalgamation.
1. Passing of each board’s resolution to approve the amalgamation
The board must issue a statement to confirm that the assets of the amalgamating company are not subject to any floating charge or a floating charge exists. And the chargee has consented to the amalgamation proposal, and to verify the solvency of the amalgamating company.
2. Publishing of the notice of amalgamation in newspapers
Approval of the amalgamation by shareholders via a special resolution
3. Approval of the amalgamation by shareholders via a
special resolution
Once a special resolution has been passed, statutory returns are required to be filed with the companies’ registry. Unless there are objections from creditors to the amalgamation proposal before a prescribed date, a certificate of amalgamation will normally be issued by the companies’ registry.
The amalgamation is effective from the date specified in the certificate of amalgamation.
