Types of shareholder meetings in Hong Kong.

Types of shareholder meetings in Hong Kong

There are different types of meetings that may be held by a Hong Kong company, such as meetings of the members (shareholders), a particular class of members, board (directors) or committee. This guide will focus on the major types of the meeting of shareholders in Hong Kong.

Let’s start.

The two major types of shareholders meetings in Hong Kong: annual general meetings (AGMs) and general meetings.

Annual general meeting

AGMs are meetings of the shareholders of the company, which is required to be held within a prescribed period pursuant to section 610 of the Companies Ordinance.

When is the annual general meeting held?

Under section 610 of the Companies Ordinance, a company must hold its AGM with the following period:

  • In the case of a company limited by guarantee or a private company, nine months after the end of its accounting reference period
  • In the case of any other companies, six months after the end of its accounting reference period

If the company’s accounting reference period is the company’s first accounting reference period and exceeds 12 months, the AGM must be held within the following period:

  • Company limited by guarantee or a private company:
    • Nine months after the first anniversary of the company’s incorporation, or
    • Three months after the end of that accounting reference period, whichever is the later
  • Any other company:
    • Six months after the first anniversary of the company’s incorporation, or
    • Three months after the end of that accounting reference period, whichever is the later

Businesses of AGM

The business usually conducted in an AGM (i.e., the ordinary business) include:

  • Consideration of the audited accounts and reports of the directors and auditors
  • Declaration of dividends
  • Election of directors in place of those retiring, if any, and the fixing of their remuneration
  • Appointment of auditors and the fixing of their remuneration.

Notice of AGM

The period of notice required depends on the type of meeting and the provision of the company’s articles of association.

In any event, at least 21 clear days (excluding the day of serving notice and day of the meeting) must be given for an annual general meeting unless consent to short notice is given by all the shareholders entitled to attend and vote thereat.

The notice must be in hard copy form, in electric form or made available on a website.

The notice should include the following information:

  • The meeting’s date and time
  • The place of the meeting
  • The general nature of the business to be dealt with at the meeting
  • Must state that the meeting is an AGM
  • The resolution(s) intended to be moved at the meeting

For a company having a share capital, the notice must also state that a shareholder entitled to attend and vote at the meeting is entitled to appoint a proxy to attend and vote on his behalf and that a proxy need not be a shareholder of the company.

Who are entitled to receive the annual general meeting notice?

According to section 574, the following persons are entitled to receive the notice of an AGM:

  • Every member of the company
  • Every director
  • The auditors

If the company is a listed company, the notice must be given to every member not entitled to vote at the meeting in the same manner and time as members entitled to vote.

Exemptions from holding the annual general meeting

A company is not required to hold an AGM if:

  • Everything that is required to be done at the meeting is done by a written resolution, and copies of each document required to be laid or produced at the meeting are circulated to each member of the company on or before the circulation date of the written resolution
  • The company has only one member
  • The company is dormant

General meetings

General meetings are meetings of the shareholders other than AGMs.

Businesses of general meetings

The business usually conducted in the general meeting include:

  • Changing the company name
  • Deregistering the company
  • Obtain a general mandate
  • Alteration of the articles of association
  • Alternation of the share capital

Notice of general meeting

For a general meeting, at least 14 clear days’ notice must be given if the company is a limited company.

If the company is an unlimited company, at least seven days’ notice must be given unless consent to short notice is given by shareholders having not less than 95% of the voting rights.

Like the notice of AGM, a notice of a general meeting must be given in hard copy form or in electric form or made available on a website.

The content of the notice of general meetings is similar to that of the notice of AGM except that one should state that the meeting is a general meeting.

Who can call for a general meeting?

Section 565 of the Companies Ordinance provides that the directors may call a general meeting. The company secretary may call a general meeting on the instruction of the board of directors. In addition, sections 566, 569 and 570 of the Ordinance also give authority to the directors, members and the Court to convene general meetings under special circumstances.

Resolutions

There are two types of resolutions, which are ordinary resolution and special resolution.

Ordinary resolution

An ordinary resolution means that the resolution is passed by a simple majority.

A resolution passed on a show of hands is passed by a simple majority of the total of:

  • The number of the members who vote in person
  • The number of persons who vote on the resolution as duly appointed proxies of members entitled to vote

A resolution passed on a poll is passed by a simple majority of members representing a simple majority of the total voting rights of all members who vote in person or by proxy on the resolution.

Special resolution

A special resolution means a resolution that is passed by a majority of at least 75%.

A resolution passed on a show of hands is passed by at least 75% of the total of:

  • The number of members who vote in person
  • The number of persons who vote on the resolution as duly appointed proxies of members entitled to vote

A resolution passed on a poll is passed if members representing at least 75% of the total voting rights of all the members who vote in person or by proxy on the resolution.

Conclusion

The two main types of shareholder meetings in Hong Kong are the annual general meeting and general meeting. The rules and regulations which govern the holding of the meetings are laid down by the common law, the Ordinance and the company’s articles of association. To ensure your company complies with the company meeting requirements, we recommend contacting Acclime.

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