(i) provide a legal framework for listed companies to hold shares bought back as treasury shares and to dispose of them, which will provide more flexibility for listed companies to manage their share capital; and
(ii) promote paperless corporate communication for both listed and unlisted companies by introducing a new implied consent mechanism for dissemination of corporate communication to members and debenture holders by means of website in addition to the existing express consent or deemed consent mechanism.
(a) providing that a company may choose to adopt the implied consent mechanism for disseminating corporate communication by means of website provided that -
- its articles of association contain a provision that the company may generally disseminate corporate communication to its members by means of website / the instrument creating the debenture contains a provision that the company may generally disseminate corporate communication to its debenture holders by means of website or the equivalent debenture holders have so resolved in accordance with the provisions of that instrument, and
- the company has sent a one-off notification to the relevant members or debenture holders to inform them of the arrangements for dissemination of corporate communication by means of website;
(c) providing that for an unlisted company adopting the implied consent mechanism for disseminating corporate communication by means of website, a prior express consent must be obtained from the relevant members or debenture holders before it is obviated from the separate notification requirement;
(d) providing that members or debenture holders may request the company to provide free electronic copies of corporate communication;
(e) revising provisions of the model articles so that new companies formed under the Companies Ordinance (Cap. 622) may adopt the new model articles to make use of the implied consent mechanism to disseminate corporate communication by means of website.
• there is no need to send an individual request to members or debenture holders to seek their consent for communication by means of website and wait for 28 days for their response to such request; and
• for listed companies and for unlisted companies which have obtained express consent from members or debenture holders for obviation of the separate notification requirement, there is no need to send separate notification to members or debenture holders upon each upload of new document or information on the companies’ website, resulting in reduction in paper consumption and/or administrative work for sending the separate notification by electronic means.
[Please refer to sections 833(3)(c), (4)(b), (4)(c), (5)(b) and (5)(c) and 833A(2), (4) and (9) of the Companies Ordinance (Cap. 622)]
If the articles of association are silent on the mode of dissemination of documents or information or only contain a provision to the effect that documents or information generally may be sent or supplied by the company in electronic form, the articles of association must be amended before the company may adopt the implied consent mechanism.
Communication in electronic form (governed by section 831 of the Companies Ordinance (Cap. 622)) is distinct from communication by means of website (governed by section 833 of the Companies Ordinance).
Those companies which have yet amended their articles but would like to adopt the implied consent mechanism for dissemination of corporate communication by means of website may consider amending their articles by making reference to article 100(1) of Schedule 1 (for public companies limited by shares), article 80(1) of Schedule 2 (for private companies limited by shares) or article 54(1) of Schedule 3 (for companies limited by guarantee) to the Companies (Model Articles) Notice (Cap. 622H).
The Companies Registry has also provided four sample articles for use. Companies may view the samples under the section “Electronic Services > e-Services Portal > Electronic Services at the e-Services Portal > e-Incorporation and e-Filing Services > Document Submission” of the Companies Registry’s website.
No. The introduction of the implied consent mechanism aims to provide additional flexibility for companies to choose the consent mechanism for dissemination of corporate communication that suits their own needs, so as to further promote paperless corporate communication. The consent mechanisms currently adopted by companies would not be affected.
The company is required to issue a one-off notification to the relevant members or debenture holders only if the company wishes to rely on the implied consent mechanism (instead of the express consent or deemed consent mechanism) regarding communication by means of website.
Similar to the express consent and deemed consent mechanisms, the implied consent is given on an individual basis. A company is required to send a one-off notification to each member in accordance with section 833A of the Companies Ordinance (Cap. 622) in order to obtain the implied consent of the member concerned.
Therefore, when a new member joins the company, if the company wishes to make use of the implied consent mechanism to disseminate corporate communication by means of website to such member, a one-off notification must first be sent to such member.
• the arrangements regarding sending or supplying document or information by the company to a member or debenture holder by making it available on a website;
• the address of the website;
• the place on the website where those documents or information may be accessed;
• how to access those documents or information;
• (if applicable) containing an invitation to the member or debenture holder to agree generally that any document or information may be sent or supplied in electronic form by the company to the person for the purposes of section 831(3)(a) of the Companies Ordinance (Cap. 622) (“CO”) and to specify an address for the purpose.
• the rights of the members or debenture holders to request the documents or information to be sent or supplied by the company in electronic form under section 833C of the CO or in hard copy form under section 837 of the CO.
A company must first send a one-off notification to the relevant members or debenture holders before it may make use of the implied consent mechanism to disseminate corporate communication to the relevant members or debenture holders by means of website. There is no requirement under the Companies Ordinance (Cap. 622) as to when the one-off notification must be sent provided that the one-off notification is sent before the dissemination of corporate communication.
However, to enable members and debenture holders to fully understand the new arrangements for corporate communication, companies are recommended to send the one-off notification as early as practicable to provide advance notice to the relevant members and debenture holders.
In the event that members or debenture holders have no access to the internet, such members or debenture holders may, upon receiving the one-off notification regarding the implementation of the new arrangements, give a notice of revocation to the company pursuant to section 822 of the Companies Ordinance (Cap. 622).
Since members or debenture holders of listed companies may make use of the News Alert service provided by The Hong Kong Exchanges and Clearing Limited to receive instant notification each time when new corporate communication is uploaded to the website, interests of members or debenture holders of listed companies would not be harmed even if the separate notification requirement is not applicable to listed companies under the implied consent mechanism. On the other hand, since the News Alert service is not available to unlisted companies, to protect the interests of members or debenture holders of unlisted companies, unlisted companies must first obtain express consent from such members or debenture holders before the separate notification requirement may be obviated.
