HONG KONG SAR, CHINA Law and Practice Contributed by: Vincent Lung and Mike Yeung, Parkside Chambers
Written Board Resolutions Many companies also make board decisions by writ - ten resolution, if permitted by the articles (some arti - cles require a unanimous decision before there may be a written board resolution). Written resolutions are convenient for routine matters or urgent decisions where a physical meeting is unnecessary or imprac - ticable. However, written resolutions are generally seen as less appropriate for complex or controversial matters. Shareholder Meetings Shareholders make decisions at general meetings or, in private companies, by written resolution where per - mitted. Meetings may be physical, hybrid or virtual, provided the statutory requirements and those stated in the articles are satisfied. The notice must identify the business to be consid - ered. Shareholders may attend, speak and vote per - sonally or by proxy. Listed companies generally vote by poll and must announce the poll results. Written Shareholder Resolutions Private companies often use written shareholder resolutions for routine (and mostly uncontroversial) approvals. They are efficient where the shareholder base is small.
Some decisions require an ordinary resolution, passed by a simple majority. More fundamental decisions (eg, amendment of articles) require a special resolution which is passed by at least 75% of the votes. Reserved Matters in Private Companies In private companies and joint ventures, reserved mat - ters are often created by shareholders’ agreements or bespoke articles. These may require a super-majority (or even unanimous) shareholder consent for key mat - ters such as issuing shares, incurring debt, changing business, approving budgets, hiring senior execu - tives, entering major contracts or disposing of assets. Reserved matters are commercially important because they allow investors or minority shareholders to pro - tect their position without taking over or unduly inter - For listed companies, the Listing Rules reserve certain matters for shareholder approval. These include major transactions, very substantial acquisitions or dispos - als, connected transactions and share schemes. Where a transaction involves a connected person or controlling shareholder, independent shareholder approval may be required. Interested shareholders may be required to abstain from voting. Company Secretary fering with daily management. Listed Company Decisions The work of a company secretary is usually admin - istrative in nature and generally does not involve any executive decision-making. 2.3 Decision-Making Processes Board Meetings Board decisions are usually made at board meetings. The articles regulate notice, quorum, voting, disclo - sure of interests and minutes. Directors should receive sufficient information before making decisions. For important matters, board papers should identify the proposal, reasons, financial impact, risks, alternatives, conflicts and any profes - sional advice obtained.
3. Directors and Officers 3.1 Board Structure Unitary Board
Hong Kong companies have a unitary board structure. The board is responsible for managing and supervis - ing the company’s affairs. There is no separate super - visory board (as is common in some civil law jurisdic - tions). A private company may have a simple board structure, sometimes even with only one director. Public compa - nies and companies limited by guarantee must have at least two directors.
322 CHAMBERS.COM
Powered by FlippingBook