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香港新会社条例(第622章) 201~300条

1-100 101-200 201-300 301-400 401-500 501-600 601-700 701-800 801-900 901-921 Schedule

Section:

201

Statement of capital

(1) This section applies if a provision of this Part or Part 5 requires a statement of capital to be included in a return or notice delivered to the Registrar for registration.

(2) A statement of capital must state
  (a) the total number of issued shares in the company;
  (b) the amount paid up or regarded as paid up and the amount (if any) remaining unpaid or regarded as remaining unpaid on the total number of issued shares in the company;
  (c) the total amount of the company's issued share capital; and
  (d) for each class of shares
    (i) the particulars specified in subsection (3);
    (ii) the total number of issued shares in the class;
    (iii) the amount paid up or regarded as paid up and the amount (if any) remaining unpaid or regarded as remaining unpaid on the total number of issued shares in the class; and
    (iv) the total amount of issued share capital of the class.

(3) The particulars are
  (a) particulars of any voting rights attached to shares in the class, including rights that arise only in certain circumstances;
  (b) particulars of any rights attached to shares in the class, as respects dividends, to participate in a distribution;
  (c) particulars of any rights attached to shares in the class, as respects capital, to participate in a distribution (including on a winding up); and
  (d) whether or not shares in the class are redeemable shares.

Section:

202

Notice of paid up capital

(1) An official document of a company that states the company's issued capital must also state no less prominently the company's paid up capital.

(2) If a company issues, circulates or distributes an official document in Hong Kong that does not comply with subsection (1), the company, and every responsible person of the company, commit an offence, and each is liable to a fine at level 3.

(3) In this section
official document(正式文件) of a company, means a notice, circular, advertisement or other official publication of the company.

Part:

5

Transactions in relation to Share Capital

Division:1

Preliminary

Section:

203

Interpretation

(1) In this Part
Commission (監察機關) means
  (a) subject to paragraphs (b) and (c), the Securities and Futures Commission referred to in section 3(1) of the
Securities and Futures Ordinance (Cap 571);
  (b) if any relevant transfer order made under section 25 of that Ordinance is in force, the recognized exchange company concerned or both the Securities and Futures Commission and the recognized exchange company concerned, in accordance with the provisions of that order; or
  (c) if any relevant transfer order made under section 68 of that Ordinance is in force, the recognized exchange controller concerned or both the Securities and Futures Commission and the recognized exchange controller concerned, in accordance with the provisions of that order;
contingent buy-back contract (待確定回購合約) means a contract entered into by a company relating to any of its shares
  (a) that is not a contract to buy back those shares; but
  (b) under which the company may (subject to any conditions) become entitled or obliged to buy back those shares;
distributable profits (可分派利潤), in relation to the making of a payment by a company, means those profits out of which the company could lawfully make a distribution equal in value to the payment;
recognized exchange controller (認可控制人) has the meaning given by section 1 of Part 1 of Schedule 1 to the Securities and Futures Ordinance (Cap 571);
specified Chinese language newspaper (指明中文報章) means a Chinese language newspaper that is specified under
subsection (2);
specified English language newspaper (指明英文報章) means an English language newspaper that is specified under subsection (2).

(2) The Chief Secretary for Administration may specify Chinese language newspapers and English language newspapers for the purposes of this Part and must publish a list of the specified newspapers in the Gazette.

Division:2

Solvency Test

Section:

204

Application of Division

This Division has effect for the following transactions
  (a) a reduction of share capital by special resolution supported by a solvency statement under Subdivision 2 of
Division 3;
  (b) a payment out of capital in respect of a share redemption or buy-back under Division 4;
  (c) the giving of financial assistance by a company under Subdivision 4 of Division 5.

Section:

205

Solvency test

A company satisfies the solvency test in relation to a transaction if
  (a) immediately after the transaction there will be no ground on which the company could be found to be unable to pay its debts; and
  (b) either
    (i) if it is intended to commence the winding up of the company within 12 months after the date of the transaction, the company will be able to pay its debts in full within 12 months after the commencement of the winding up; or
    (ii) in any other case, the company will be able to pay its debts as they become due during the period of 12 months immediately following the date of the transaction.

Section:

206

Solvency statement

(1) A solvency statement in relation to a transaction is a statement that each of the directors making it has formed the opinion that the company satisfies the solvency test in relation to the transaction.

(2) In forming an opinion for the purpose of making a solvency statement, a director must
  (a) inquire into the company's state of affairs and prospects; and
  (b) take into account all the liabilities of the company (including contingent and prospective liabilities).

(3) A solvency statement
  (a) must be in the specified form;
  (b) must state
    (i) the date on which it is made; and
    (ii) the name of each director making it; and
  (c) must be signed by each director making it.

(4) Subsection (3)(a) does not apply to a solvency statement made for the purposes of the giving of financial assistance by a company under Subdivision 4 of Division 5.

Section:

207

Offences regarding solvency statement

A director who makes a solvency statement without having reasonable grounds for the opinion expressed in it commits an offence and is liable
  (a) on conviction on indictment to a fine of $150,000 and to imprisonment for 2 years; or
  (b) on summary conviction to a fine at level 6 and to imprisonment for 6 months.

Section:

208

Power to modify solvency test by regulation

(1) The Chief Executive in Council may make regulations
  (a) modifying the solvency test or its application to any transaction or class of transactions; or
  (b) modifying the matters that a director is required to take into account in forming an opinion for the purpose of making a solvency statement.

(2) Regulations made under this section are subject to the approval of the Legislative Council.

Division:3

Reduction of Share Capital

Subdivision:1

General Provisions

Section:

209

Application of Division

This Division applies to
  (a) a company limited by shares; and
  (b) a company limited by guarantee having a share capital that was formed as, or became, such a company under a former Companies Ordinance before 13 February 2004.

Section:

210

Permitted reductions of share capital

(1) A company may, in accordance with the procedure specified in section 211, reduce its share capital under this
Division in any way.

Examples

1. A company may extinguish or reduce the liability on any of its shares in respect of share capital not paid up.
2. A company may, either with or without extinguishing or reducing liability on any of its shares
  (a) cancel any paid-up share capital that is lost or unrepresented by available assets; or
  (b) repay any paid-up share capital in excess of the companys wants.

(2) However, a company must not reduce its share capital if, as a result of the reduction, there would no longer be any member of the company holding shares other than redeemable shares.

(3) This Division is subject to any provision of a company's articles that prohibits or restricts the reduction of the company's share capital.

Section:

211

Procedure for a company to reduce its share capital

The procedure for a company to reduce its share capital under this Division is
  (a) by special resolution supported by a solvency statement under Subdivision 2; or
  (b) by special resolution confirmed by the Court under Subdivision 3.

Section:

212

Offence if share capital is reduced in contravention of Division

(1) If a company reduces its share capital in contravention of this Division, the company, and every responsible person of the company, commit an offence and each is liable
  (a) on conviction on indictment to a fine of $1250000 and to imprisonment for 5 years; or
  (b) on summary conviction to a fine of $150000 and to imprisonment for 12 months.

(2) An offence is not committed under this section in relation to a reduction of share capital by a company only because one or more directors of the company commit an offence under section 207 in making a solvency statement for the purposes of the reduction of share capital.

(3) An offence is not committed under this section if the reduction of share capital occurs as a result of a share redemption or buy-back in accordance with Division 4 or as otherwise provided in this Ordinance.

Section:

213

Liability of members following reduction of share capital

(1) If a company's share capital is reduced under this Division, a past or present member of the company is not liable in respect of a share to a call or contribution exceeding in amount the difference (if any) between
  (a) the issue price of the share; and
  (b) the aggregate of the amount paid up on the share (if any) and the amount reduced on the share.

(2) Subsection (1) is subject to section 232.

(3) Nothing in this section affects the rights of the contributories among themselves.

Section:

214

Reserves arising from reductions of share capital

(1) If a company reduces its share capital in accordance with this Division, a reserve arising from the reduction is to be regarded for the purposes of Part 6 as realized profit.

(2) Subsection (1) is subject to anything to the contrary in
  (a) an order of, or undertaking given to, the Court;
  (b) the resolution for, or any other resolution relevant to, the reduction of share capital; or
  (c) the company's articles.

Subdivision:2

Reduction of Share Capital by Special Resolution Supported by Solvency Statement

Section:

215

Special resolution for reduction of share capital

(1) A company may reduce its share capital by special resolution in accordance with this Subdivision.

(2) The special resolution and the reduction of share capital take effect when the return under section 224 or 225 in relation to the reduction is registered by the Registrar.

Section:

216

Solvency statement for reduction of share capital

(1) All directors of the company must make a solvency statement that complies with Division 2 in relation to the reduction of share capital.

(2) The special resolution for reduction of share capital must be passed within 15 days after the date of the solvency statement.

(3) If the special resolution is proposed as a written resolution, a copy of the solvency statement must be sent to every member of the company at or before the time when the proposed resolution is sent to them.

(4) If the special resolution is proposed at a meeting, a copy of the solvency statement must be made available for inspection by members at the meeting.

(5) The special resolution is not effective if subsection (3) or (4) (as applicable) is not complied with.

Section:

217

Special resolution: exercise of voting rights

(1) If the special resolution for reduction of share capital is proposed as a written resolution, a member of the company holding shares to which the resolution relates is not an eligible member for the purposes of Subdivision 2 of Division 1 of Part 12 (written resolution) in respect of those shares.

(2) If the special resolution is proposed at a meeting, the resolution is not effective if
  (a) any member of the company holding shares to which the resolution relates exercises the voting rights carried by any of those shares; and
  (b) the resolution would not have been passed if the member had not done so.

(3) For the purposes of subsection (2)
  (a) a member holding shares to which the resolution relates is to be regarded as exercising the voting rights carried by those shares not only if the member votes in respect of them on a poll on the question whether the resolution should be passed but also if the member votes on the resolution otherwise than on a poll;
  (b) any member of the company may demand a poll on that question; and
  (c) a vote or a demand for a poll by a person as proxy for a member is the same as a vote or a demand by the member.

(4) The special resolution is not effective if a demand for a poll referred to in subsection (3)(b) is refused.

(5) This section does not apply in the case of a reduction of share capital that applies equally to all issued shares in the company.

Section:

218

Public notice of reduction of share capital

(1) If a special resolution for reduction of share capital is passed, the company must, on or before the date specified in subsection (2), publish a notice in the Gazette
  (a) stating that the company has approved a reduction of share capital;
  (b) specifying the amount of share capital to be reduced and the date of the special resolution;
  (c) stating where the special resolution and solvency statement are available for inspection; and
  (d) stating that a member of the company who did not consent to or vote in favour of the special resolution or a creditor of the company may, within 5 weeks after the date of the special resolution, apply to the Court under section 220 for cancellation of the special resolution.

(2) The date is
  (a) a date that falls on the last working day of the week after the week in which the special resolution is passed; or
  (b) if the period between the date in paragraph (a) and the date on which the special resolution is passed is less than 4 business days (both dates exclusive), a date that falls on the last working day of the week next following.

Examples

1. The special resolution is passed on 2 February of a year (Thursday). Apart from Saturdays and Sundays, all other dates in February of that year are business days. The date that falls on the last working day of the week after the week in which the special resolution is passed is 10 February (Friday) of that year. There are 5 business days between 2 February and 10 February. Therefore, the relevant notice must be published in the Gazette on or before 10 February (Friday) of that year.
2. The special resolution is passed on 30 March of a year (Friday). Both 4 April (Wednesday) and 6 April (Friday) of that year are general holidays. 2 April (Monday), 3 April (Tuesday), 5 April (Thursday) and 13 April (Friday) of that year are business days. The date that falls on the last working day of the week after the week in which the special resolution is passed is 5 April (Thursday). There are only 2 business days between 30 March and 5 April. Therefore, the relevant notice must be published in the Gazette on or before the last working day of the week next following, which is 13 April (Friday) of that year.

(3) Before the end of the week after the week in which the special resolution for reduction of share capital is passed, the company must also
  (a) publish a notice to the same effect as the notice under subsection (1) in at least one specified Chinese language newspaper and at least one specified English language newspaper; or
  (b) give written notice to that effect to each of its creditors.

(4) If the company contravenes subsection (1) or (3), the company, and every responsible person of the company, commit an offence, and each is liable to a fine at level 3.

(5) The company must deliver to the Registrar for registration a copy of the solvency statement no later than the day on which the company
  (a) publishes the notice under subsection (1); or
  (b) if earlier, first publishes the notice or gives notice to creditors under subsection (3).

(6) If the company contravenes subsection (5), the company, and every responsible person of the company, commit an offence, and each is liable to a fine at level 5 and, in the case of a continuing offence, to a further fine of
$1000 for each day during which the offence continues.

(7) For the purposes of subsection (2)
business day(辦公日) means a day that is not
  (a) a general holiday;
  (b) a Saturday; or
  (c) a black rainstorm warning day or gale warning day as defined by section 71(2) of the Interpretation and General Clauses Ordinance (Cap 1);
working day(工作日) means a day that is not
  (a) a general holiday; or
  (b) a Saturday.

Section:

219

Inspection of special resolution and solvency statement

(1) The company must ensure that the special resolution for reduction of share capital and the solvency statement made in relation to it are kept at its registered office or at a place prescribed by regulations made under section 657 for the period
  (a) beginning on the day on which the company
    (i) publishes the notice under section 218(1); or
    (ii) if earlier, first publishes the notice or gives notice to creditors under section 218(3); and
  (b) ending 5 weeks after the date of the special resolution.

(2) The company must permit a member or creditor of the company to inspect the special resolution and solvency statement without charge during business hours in that period.

(3) If the company contravenes subsection (1) or (2), the company, and every responsible person of the company, commit an offence, and each is liable to a fine at level 5 and, in the case of a continuing offence, to a further fine of $1000 for each day during which the offence continues.

(4) If the company contravenes subsection (2), the Court may by order require the company to permit an immediate inspection.

Section:

220

Application to Court by members or creditors

(1) Subject to subsection (2), a member or creditor of the company may apply to the Court, within 5 weeks after the date of the special resolution for reduction of share capital, for cancellation of the resolution.

(2) A member who consented to or voted in favour of the special resolution is not entitled to apply.

(3) An application may be made on behalf of the persons entitled to apply by any one or more of them appointed in writing by all of them.

(4) If an application is made under this section
  (a) the applicant must, as soon as possible, serve the application on the company; and
  (b) the company must give the Registrar notice in the specified form of the application within 7 days after the day on which the application is served on the company.

(5) If the company contravenes subsection (4)(b), the company, and every responsible person of the company, commit an offence, and each is liable to a fine at level 3 and, in the case of a continuing offence, to a further fine of $300 for each day during which the offence continues.

Section:

221

Power of Court to adjourn proceedings

(1) The Court may adjourn proceedings on an application under section 220 so that an arrangement may be made to its satisfaction for the protection of the interests of dissentient members or dissentient creditors.

(2) The Court may give any directions and make any orders it thinks expedient for facilitating or carrying into effect any such arrangement.

Section:

222

Power of Court to confirm or cancel special resolution

(1) On an application under section 220, the Court must make an order confirming or cancelling the special resolution for reduction of share capital, and may do so on any terms and conditions it thinks fit.

(2) If the Court confirms the special resolution, it may by order alter or extend any date or period of time specified—
  (a) in the special resolution; or
  (b) in any provision of this Division applying to the special resolution or the reduction of share capital.

(3) If the Court thinks fit, the order may
  (a) provide for the company to buy back the shares of any of its members and for the reduction accordingly of the company's share capital;
  (b) provide for the protection of the interests of members or creditors of the company;
  (c) make any alteration to the company's articles that may be required as a consequence;
  (d) require the company not to make any, or any specified, alteration to its articles.

(4) If the order of the Court requires the company not to make any, or any specified, alteration to its articles, the company does not have power to make any such alteration without leave of the Court.

(5) The powers of the Court under this section do not limit its powers under section 221.

Section:

223

Company to deliver copy of order of Court to Registrar

(1) Within 15 days after the making of an order by the Court under section 222, or within any longer period ordered by the Court, the company must deliver an office copy of the order to the Registrar for registration.

(2) If the company contravenes subsection (1), the company, and every responsible person of the company, commit an offence, and each is liable to a fine at level 3 and, in the case of a continuing offence, to a further fine of $300 for each day during which the offence continues.

Section:

224

Registration of return if no application to Court

(1) If
  (a) no application is made under section 220 in respect of the special resolution for reduction of share capital; and
  (b) the company delivers a return that complies with subsection (2) to the Registrar no earlier than 5 weeks and no later than 7 weeks after the date of the special resolution,
the Registrar must register the return.

Note

Under section 215(2), the special resolution and the reduction of share capital take effect when the return is registered by the Registrar.

(2) The return
  (a) must be in the specified form;
  (b) must contain particulars of the reduction of share capital; and
  (c) must include a statement of capital, as at the time immediately after the reduction of share capital, that complies with section 201.

Section:

225

Registration of return if application to Court

(1) If
  (a) an application is made under section 220 in respect of the special resolution for reduction of share capital;
  (b) either
    (i) the Court makes an order under section 222 confirming the special resolution; or
    (ii) the proceedings on the application are ended without determination by the Court (for example, by the withdrawal of the application); and
  (c) the company delivers to the Registrar a return that complies with subsection (2)
    (i) within 15 days after the making of the order, or within any longer period ordered by the Court; or
    (ii) within 15 days after the proceedings are ended without determination by the Court or, if there are more than one such proceedings, the last of them are so ended,
the Registrar must register the return.

Note

Under section 215(2), the special resolution and the reduction of share capital take effect when the return is registered by the Registrar.

(2) The return
  (a) must be in the specified form;
  (b) must contain particulars of the reduction of share capital; and
  (c) must include a statement of capital, as at the time immediately after the reduction of share capital, that complies with section 201.

Subdivision:3

Reduction of Share Capital Confirmed by Court

Section:

226

Special resolution and application to Court for confirmation of reduction of share capital

(1) A company may pass a special resolution for reduction of share capital under this Subdivision and apply by petition to the Court for an order confirming the reduction.

(2) Unless the Court directs otherwise, section 227 (creditors entitled to object to reduction of share capital) applies if the proposed reduction of share capital involves either
  (a) the diminution of liability in respect of unpaid share capital; or
  (b) the payment to a shareholder of any paid-up share capital.

(3) The Court may direct that section 227 is not to apply to any class or classes of creditors if the Court thinks it proper to do so, having regard to any special circumstances of the case.

(4) The Court may direct that section 227 is to apply in any other case.

Section:

227

Creditors entitled to object to reduction of share capital

(1) If this section applies (see section 226(2) and (4)), a creditor of the company is entitled to object to the reduction of share capital if the creditor is entitled, at the date fixed by the Court, to any debt or claim that would be admissible in proof against the company if the company were to commence being wound up on that date.

(2) The Court must settle a list of creditors entitled to object.

(3) For the purposes of subsection (2), the Court
  (a) must ascertain, as far as possible without requiring an application from any creditor, the names of those creditors and the nature and amount of their debts or claims; and
  (b) may publish a notice fixing a period within which, or a date by which, creditors not on the list are to claim to be entered on the list or are to be excluded from the right of objecting.

(4) If a creditor on the list whose debt or claim is not discharged or has not determined does not consent to the reduction, the Court may, if it thinks fit, dispense with the consent of the creditor on the company securing payment of the debt or claim.

(5) For the purposes of subsection (4), the debt or claim must be secured by appropriating (as the Court directs) the following amount
  (a) if the company admits the full amount of the debt or claim or, though not admitting it, is willing to provide for it, the full amount of the debt or claim; or
  (b) if the company does not admit, and is not willing to provide for, the full amount of the debt or claim, or if the amount is contingent or not ascertained, an amount fixed by the Court after an inquiry and adjudication as if the company were being wound up by the Court.

Section:

228

Offence in connection with creditors list

(1) An officer of a company
  (a) must not intentionally or recklessly
    (i) conceal the name of a creditor entitled to object to the reduction of share capital; or
    (ii) misrepresent the nature or amount of the debt or claim of a creditor; or
  (b) must not be knowingly concerned in any such concealment or misrepresentation.

(2) A person who contravenes subsection (1) commits an offence and is liable
  (a) on conviction on indictment to a fine of $150000 and to imprisonment for 2 years; or
  (b) on summary conviction to a fine at level 6 and to imprisonment for 6 months.

Section:

229

Order of Court confirming reduction of share capital

(1) On an application by petition under section 226, the Court may make an order confirming the reduction of share capital on any terms and conditions it thinks fit.

(2) The Court must not confirm the reduction of share capital unless it is satisfied, with respect to every creditor of the company who is entitled to object to the reduction of share capital under section 227, that
  (a) the creditor's consent has been obtained; or
  (b) the creditor's debt or claim has been discharged, has determined or has been secured.

Section:

230

Registration of order, minute and return

(1) If
  (a) the Court makes an order under section 229 confirming the reduction of share capital; and
  (b) within 15 days after the making of the order, or within any longer period ordered by the Court, the company delivers to the Registrar
    (i) an office copy of the order;
    (ii) a minute that complies with subsection (2) and that is approved by the Court; and
    (iii) a return that complies with subsection (3),
the Registrar must register the order, minute and return.

(2) The minute must state, with respect to the company's share capital as altered by the order
  (a) the amount of the share capital;
  (b) the total number of issued shares in the company;
  (c) the amount of each share; and
  (d) the amount paid up and the amount (if any) remaining unpaid on each share.

(3) The return
  (a) must be in the specified form;
  (b) must contain particulars of the reduction of share capital (by reference to the order or minute, or otherwise); and
  (c) must include a statement of capital, as at the time immediately after the reduction of share capital, that complies with section 201.

(4) The special resolution, as confirmed by the order, takes effect on registration of the order, minute and return by the Registrar.

(5) Notice of the registration must be published in the manner directed by the Court.

Section:

231

Certification of registration

(1) The Registrar must certify the registration of an order, minute and return under section 230.

(2) The certificate must be signed by the Registrar.

(3) The certificate is conclusive evidence
  (a) that the requirements of this Ordinance for the reduction of share capital have been complied with; and
  (b) that the company's share capital is as stated in the minute.

Section:

232

Liability to creditors omitted from list of creditors

(1) This section applies to a reduction of share capital confirmed by the Court under section 229 if
  (a) a creditor entitled to object to the reduction of share capital was not entered on the list of creditors because the creditor was not aware
    (i) of the proceedings for reduction of share capital; or
    (ii) of their nature or effect with respect to the creditor's debt or claim; and
  (b) after the reduction of share capital the company is unable to pay the debt or claim.

(2) A person who was a member of the company on the date of registration of the order confirming the special resolution for the reduction is liable to contribute for the payment of the debt or claim an amount not exceeding the amount that the person would have been liable to contribute if the company had commenced to be wound up on the day before that date.

(3) If the company is wound up, the Court, on application by the creditor and proof of the creditor's lack of
awareness referred to in subsection (1)(a), may, if it thinks fit
  (a) settle a list of persons liable to contribute under this section; and
  (b) make and enforce calls and orders on them as if they were ordinary contributories in a winding up.

(4) Nothing in this section affects the rights of the contributories among themselves.

Division:4

Share Redemptions and Buy-backs

Subdivision:1

Preliminary

Section:

233

Application of Division

This Division applies to
  (a) a company limited by shares; and
  (b) a company limited by guarantee having a share capital that was formed as, or became, such a company under a former Companies Ordinance before 13 February 2004.

Subdivision:2

Redeemable Shares

Section:

234

Issue of redeemable shares

(1) Subject to subsections (2) and (3), a company may issue redeemable shares.

(2) A company's articles may prohibit or restrict the issue of redeemable shares.

(3) A company must not issue redeemable shares at a time when there are no issued shares in the company other than redeemable shares.

Section:

235

Terms, conditions and manner of redemption

(1) The directors of a company may determine the terms, conditions and manner of redemption of shares if they are authorized to do so
  (a) by the company's articles; or
  (b) by resolution of the company.

(2) A resolution under subsection (1)(b) may be an ordinary resolution even if it amends the company's articles.

(3) If the directors are authorized under subsection (1) to determine the terms, conditions and manner of redemption of shares
  (a) they must do so before the shares are allotted; and
  (b) any obligation of the company to state in a statement of capital the rights attached to the shares extends to the terms, conditions and manner of redemption.

(4) If the directors are not authorized under subsection (1), the terms, conditions and manner of redemption of shares must be stated in the company's articles.

Subdivision:3

Share Buy-backs

Section:

236

General power of company to buy back its own shares

(1) Subject to subsections (2) and (3) and Subdivision 6, a company may buy back its own shares in accordance with
  (a) for a listed company, Subdivision 4;
  (b) for an unlisted company, Subdivision 5.

(2) A company's articles may prohibit or restrict a buy-back by the company of its own shares.

(3) A company must not buy back its own shares if, as a result of the buy-back, there would no longer be any member of the company holding shares other than redeemable shares.

(4) A buy-back that contravenes subsection (3) is void.

Section:

237

Retention and inspection of share buy-back contracts

(1) This section applies to
  (a) a listed company that enters into a contract for the buy-back of its own shares that is authorized under section 240; and
  (b) an unlisted company that
    (i) under an authorization under section 244, enters into a contract for the buy-back of its own shares;
    (ii) under an authorization under section 247, agrees to a variation of a contract for the buy-back of its own shares;
    (iii) under an authorization under section 251, agrees to release its rights under a contract for the buyback of its own shares; or
    (iv) under an authorization under section 254, agrees to a variation of an agreement to release its rights under a contract for the buy-back of its own shares.

(2) The company must keep at its registered office or at a place prescribed by regulations made under section 657
  (a) a copy of the contract or agreement if it is in writing; and
  (b) if not, a memorandum of its terms.

(3) The copy or memorandum must be kept from the conclusion of the contract or agreement until the end of the period of 10 years beginning on the day on which the buy-back of all the shares under the contract is completed or the day on which the contract otherwise terminates.

(4) Subject to subsection (5), the company must make the copy or memorandum available during business hours for inspection without charge by
  (a) a member of the company; and
  (b) any other person, in the case of a listed company.

(5) The company may, by resolution, impose reasonable restrictions on the making available of the copy or memorandum for inspection, as long as not less than 2 hours per day are allowed for inspection.

(6) If a company contravenes subsection (2) or (3), or if an inspection required under subsection (4) is refused, the company, and every responsible person of the company, commit an offence, and each is liable to a fine at level 5 and, in the case of a continuing offence, to a further fine of $1000 for each day during which the offence continues.

(7) In the case of a refusal of an inspection required under subsection (4), the Court may by order require the company to permit an immediate inspection.

(8) In this section
contract(合約) includes a contingent buy-back contract.

Subdivision:4

Share Buy-backs: Listed Companies

Section:

238

Share buy-back under general offer

(1) A listed company may buy back its own shares under a general offer that is authorized in advance by resolution of the company.

(2) The company must include with the notice of the proposed resolution
  (a) a copy of the document containing the proposed general offer; and
  (b) a statement, signed by the directors of the company, containing information that would enable a reasonable person to form a valid and justifiable opinion as to the merits of the offer.

(3) If, under the proposed general offer, a member of the company may be compelled to dispose of the member's
shares under Division 5 of Part 13 (compulsory acquisition after general offer for share buy-back)
  (a) the company must appoint an independent investment adviser to advise members who may be affected by the compulsory disposal on the merits of the offer; and
  (b) the resolution authorizing the offer must be a special resolution on which no non-tendering member votes.

(4) A person is eligible for appointment as an investment adviser under subsection (3)(a) only if
  (a) the person is a corporation licensed to carry on, or an authorized financial institution registered for carrying on, a business in advising on securities or advising on corporate finance under Part V of the Securities and Futures Ordinance (Cap 571); and
  (b) the person is neither
    (i) a member, officer, shadow director or employee of the company making the general offer or of an associated company of that company; nor
    (ii) an associated company of the company making the general offer.

(5) For the purposes of a special resolution referred to in subsection (3)(b)
  (a) a non-tendering member is to be regarded as voting not only if the non-tendering member votes on a poll on the question whether the resolution should be passed but also if the non-tendering member votes on the resolution otherwise than on a poll;
  (b) any member of the company may demand a poll on that question; and
  (c) a vote or a demand for a poll by a person as proxy for a member is the same as a vote or a demand by the member.

(6) In this section
general offer(公開要約) has the meaning given by section 707;
non-tendering member(不售股成員) has the meaning given by section 705.

Section:

239

Share buy-back on recognized stock market or approved stock exchange

(1) A listed company may buy back its own shares on a recognized stock market or on an approved stock exchange if the buy-back is authorized in advance by resolution of the company.

(2) The company must include a memorandum of the terms of the proposed buy-back with the notice of the proposed resolution.

(3) A resolution authorizing a buy-back under this section is valid for the period expiring on the date of the next annual general meeting of the company, and that period may be extended by the company at that annual general meeting until the date of the following annual general meeting.

(4) In this section
approved stock exchange(核准證券交易所) means a stock exchange approved for the purposes of this section by notice published in the Gazette by
  (a) the Commission; and
  (b) the recognized exchange company that operates the recognized stock market on which the shares concerned are listed.

Section:

240

Share buy-back otherwise than under section 238 or 239

(1) A listed company may buy back its own shares otherwise than under section 238 or 239 if the contract for buy- back of the shares is authorized in advance by special resolution.

(2) A contract may take the form of a contingent buy-back contract.

(3) The company must include with the notice of the proposed special resolution
  (a) a copy of the proposed contract or, if it is not in writing, a memorandum of its terms; and
  (b) a statement, signed by the directors of the company, after having made due and diligent inquiry of the members of the company holding the shares to which the proposed contract relates, containing information that would enable a reasonable person to form a valid and justifiable opinion as to the merits of the contract.

(4) A special resolution under this section is not effective if
  (a) any member of the company holding shares to which the resolution relates exercises the voting rights carried by any of those shares; and
  (b) the resolution would not have been passed if the member had not done so.

(5) For the purposes of subsection (4)
  (a) a member holding shares to which the resolution relates is to be regarded as exercising the voting rights carried by those shares not only if the member votes in respect of them on a poll on the question whether the resolution should be passed but also if the member votes on the resolution otherwise than on a poll;
  (b) any member of the company may demand a poll on that question; and
  (c) a vote or a demand for a poll by a person as proxy for a member is the same as a vote or a demand by the member.

(6) A special resolution under this section is not effective if a demand for a poll referred to in subsection (5)(b) is refused.

Section:

241

Exemptions

(1) The Commission may exempt any listed company from any of the provisions of section 238, 239 or 240, subject to any conditions it thinks fit.

(2) The Commission may
  (a) suspend or withdraw an exemption granted under subsection (1) on the ground that the conditions subject to which the exemption was granted have not been complied with or on any other ground the Commission thinks fit; or
  (b) vary any condition imposed under subsection (1).

Section:

242

No assignment of right to buy back own shares

The following rights of a listed company are not capable of being assigned
  (a) rights under a general offer authorized under section 238;
  (b) rights under a buy-back on a recognized stock market or on an approved stock exchange authorized under section 239;
  (c) rights under a contract authorized under section 240.

Section:

243

Release of right to buy back own shares

(1) An agreement by a listed company to release its rights under a contract authorized under section 240 or under a general offer authorized under section 238 is void unless the terms of the release agreement are authorized in advance by special resolution.

(2) Section 240(3), (4), (5) and (6) applies to the authorization for a proposed release agreement as it applies to the authorization for a proposed contract under section 240.

Subdivision:5

Share Buy-backs: Unlisted Companies

Section:

244

Share buy-back under contract

(1) An unlisted company may buy back its own shares under a contract that is authorized in advance by special resolution.

(2) A contract may take the form of a contingent buy-back contract.

(3) The authorization for a contract may be varied, revoked or from time to time renewed by special resolution.

(4) A special resolution conferring, varying, revoking or renewing the authorization for a contract is subject to sections 245 and 246.

Section:

245

Resolution authorizing contract: disclosure of contract details

(1) This section applies in relation to a special resolution to confer, vary, revoke or renew the authorization for a contract under section 244.

(2) A copy of the proposed contract (if it is in writing) or a memorandum setting out its terms (if it is not) must be made available to members
  (a) in the case of a written resolution, by being sent to every member of the company at or before the time when the proposed resolution is sent to them; or
  (b) in the case of a resolution proposed at a meeting, by being made available for inspection by members of the company
    (i) at the company's registered office or at a place prescribed by regulations made under section 657, for a period of not less than 15 days ending on the date of the meeting; and
    (ii) at the meeting.

(3) A memorandum referred to in subsection (2) must include the names of members holding shares to which the proposed contract relates.

(4) A copy of a proposed contract made available under subsection (2) must have annexed to it a memorandum specifying any of those names that do not appear in the proposed contract.

(5) The special resolution is not effective if the requirements of this section are not complied with.

Section:

246

Resolution authorizing contract: exercise of voting rights

(1) This section applies to a special resolution to confer, vary, revoke or renew the authorization for a contract under section 244.

(2) If the special resolution is proposed as a written resolution, a member holding shares to which the resolution relates is not an eligible member for the purposes of Subdivision 2 of Division 1 of Part 12 (written resolution) in respect of those shares.

(3) If the special resolution is proposed at a meeting, the resolution is not effective if
  (a) any member of the company holding shares to which the resolution relates exercises the voting rights carried by any of those shares; and
  (b) the resolution would not have been passed if the member had not done so.

(4) For the purposes of subsection (3)
  (a) a member holding shares to which the resolution relates is to be regarded as exercising the voting rights carried by those shares not only if the member votes in respect of them on a poll on the question whether the resolution should be passed but also if the member votes on the resolution otherwise than on a poll;
  (b) any member of the company may demand a poll on that question; and
  (c) a vote or a demand for a poll by a person as proxy for a member is the same as a vote or a demand by the member.

(5) The special resolution is not effective if a demand for a poll referred to in subsection (4)(b) is refused.

Section:

247

Variation of authorized contract

(1) An unlisted company may agree to a variation of a contract authorized under section 244 if the variation agreement is authorized in advance by special resolution.

(2) The authorization for a variation agreement may be varied, revoked or from time to time renewed by special resolution.

(3) A special resolution conferring, varying, revoking or renewing the authorization for a variation agreement is subject to sections 248 and 249.

Section:

248

Resolution authorizing variation: disclosure of details of variation

(1) This section applies in relation to a special resolution to confer, vary, revoke or renew the authorization for a variation agreement under section 247.

(2) A copy of the proposed variation agreement (if it is in writing) or a memorandum giving details of the proposed variation agreement (if it is not) must be made available to members
  (a) in the case of a written resolution, by being sent to every member of the company at or before the time when the proposed resolution is sent to them; or
  (b) in the case of a resolution proposed at a meeting, by being made available for inspection by members of the company
    (i) at the company's registered office or at a place prescribed by regulations made under section 657, for a period of not less than 15 days ending on the date of the meeting; and
    (ii) at the meeting.

(3) There must also be made available to members in accordance with subsection (2) a copy of the original contract or memorandum, together with any variations previously made.

(4) A memorandum referred to in subsection (2) must include the names of members holding shares to which the proposed variation agreement relates.

(5) A copy of a proposed variation agreement made available under subsection (2) must have annexed to it a memorandum specifying any of those names that do not appear in the proposed variation agreement.

(6) The special resolution is not effective if the requirements of this section are not complied with.

Section:

249

Resolution authorizing variation: exercise of voting rights

(1) This section applies to a special resolution to confer, vary, revoke or renew the authorization for a variation agreement under section 247.

(2) If the special resolution is proposed as a written resolution, a member holding shares to which the resolution relates is not an eligible member for the purposes of Subdivision 2 of Division 1 of Part 12 (written resolution) in respect of those shares.

(3) If the special resolution is proposed at a meeting, the resolution is not effective if
  (a) any member of the company holding shares to which the resolution relates exercises the voting rights carried by any of those shares; and
  (b) the resolution would not have been passed if the member had not done so.

(4) For the purposes of subsection (3)
  (a) a member holding shares to which the resolution relates is to be regarded as exercising the voting rights carried by those shares not only if the member votes in respect of them on a poll on the question whether the resolution should be passed but also if the member votes on the resolution otherwise than on a poll;
  (b) any member of the company may demand a poll on that question; and
  (c) a vote or a demand for a poll by a person as proxy for a member is the same as a vote or a demand by the member.

(5) The special resolution is not effective if a demand for a poll referred to in subsection (4)(b) is refused.

Section:

250

No assignment of right to buy back own shares

The rights of an unlisted company under a contract authorized under section 244 (as varied from time to time under section 247) are not capable of being assigned.

Section:

251

Release of right to buy back own shares

(1) An agreement by an unlisted company to release its rights under a contract authorized under section 244 (as varied from time to time under section 247) is void unless the terms of the release agreement are authorized in advance by special resolution.

(2) The authorization for a release agreement may be varied, revoked or from time to time renewed by special resolution.

(3) A special resolution conferring, varying, revoking or renewing the authorization for a release agreement is subject to sections 252 and 253.

Section:

252

Resolution authorizing release: disclosure of details of release

(1) This section applies in relation to a special resolution to confer, vary, revoke or renew the authorization for a release agreement under section 251.

(2) A copy of the proposed release agreement (if it is in writing) or a memorandum giving details of the proposed release agreement (if it is not) must be made available to members
  (a) in the case of a written resolution, by being sent to every member of the company at or before the time when the proposed resolution is sent to them; or
  (b) in the case of a resolution proposed at a meeting, by being made available for inspection by members of the company
    (i) at the company's registered office or at a place prescribed by regulations made under section 657, for a period of not less than 15 days ending on the date of the meeting; and
    (ii) at the meeting.

(3) There must also be made available to members in accordance with subsection (2) a copy of the original contract or memorandum, together with any variations previously made.

(4) A memorandum referred to in subsection (2) must include the names of members holding shares to which the proposed release agreement relates.

(5) A copy of a proposed release agreement made available under subsection (2) must have annexed to it a memorandum specifying any of those names that do not appear in the proposed release agreement.

(6) The special resolution is not effective if the requirements of this section are not complied with.

Section:

253

Resolution authorizing release: exercise of voting rights

(1) This section applies to a special resolution to confer, vary, revoke or renew the authorization for a release agreement under section 251.

(2) If the special resolution is proposed as a written resolution, a member holding shares to which the resolution relates is not an eligible member for the purposes of Subdivision 2 of Division 1 of Part 12 (written resolution) in respect of those shares.

(3) If the special resolution is proposed at a meeting, the resolution is not effective if
  (a) any member of the company holding shares to which the resolution relates exercises the voting rights carried by any of those shares; and
  (b) the resolution would not have been passed if the member had not done so.

(4) For the purposes of subsection (3)
  (a) a member holding shares to which the resolution relates is to be regarded as exercising the voting rights carried by those shares not only if the member votes in respect of them on a poll on the question whether the resolution should be passed but also if the member votes on the resolution otherwise than on a poll;
  (b) any member of the company may demand a poll on that question; and
  (c) a vote or a demand for a poll by a person as proxy for a member is the same as a vote or a demand by the member.

(5) The special resolution is not effective if a demand for a poll referred to in subsection (4)(b) is refused.

Section:

254

Variation of release of right to buy back own shares

(1) An unlisted company may agree to a variation of a release agreement authorized under section 251 if the variation agreement is authorized in advance by special resolution.

(2) The authorization for a variation agreement may be varied, revoked or from time to time renewed by special resolution.

(3) A special resolution conferring, varying, revoking or renewing the authorization for a variation agreement is subject to sections 255 and 256.

Section:

255

Resolution authorizing variation of release: disclosure of details of variation

(1) This section applies in relation to a special resolution to confer, vary, revoke or renew the authorization for a variation agreement under section 254.

(2) A copy of the proposed variation agreement (if it is in writing) or a memorandum giving details of the proposed variation agreement (if it is not) must be made available to members
  (a) in the case of a written resolution, by being sent to every member of the company at or before the time when the proposed resolution is sent to them; or
  (b) in the case of a resolution proposed at a meeting, by being made available for inspection by members of the company
    (i) at the company's registered office or at a place prescribed by regulations made under section 657, for a period of not less than 15 days ending on the date of the meeting; and
    (ii) at the meeting.

(3) There must also be made available to members in accordance with subsection (2) a copy of the original release agreement or memorandum, together with any variations previously made.

(4) A memorandum referred to in subsection (2) must include the names of members holding shares to which the proposed variation agreement relates.

(5) A copy of a proposed variation agreement made available under subsection (2) must have annexed to it a memorandum specifying any of those names that do not appear in the proposed variation agreement.

(6) The special resolution is not effective if the requirements of this section are not complied with.

Section:

256

Resolution authorizing variation of release: exercise of voting rights

(1) This section applies to a special resolution to confer, vary, revoke or renew the authorization for a variation agreement under section 254.

(2) If the special resolution is proposed as a written resolution, a member holding shares to which the resolution relates is not an eligible member for the purposes of Subdivision 2 of Division 1 of Part 12 (written resolution) in respect of those shares.

(3) If the special resolution is proposed at a meeting, the resolution is not effective if
  (a) any member of the company holding shares to which the resolution relates exercises the voting rights carried by any of those shares; and
  (b) the resolution would not have been passed if the member had not done so.

(4) For the purposes of subsection (3)
  (a) a member holding shares to which the resolution relates is to be regarded as exercising the voting rights carried by those shares not only if the member votes in respect of them on a poll on the question whether the resolution should be passed but also if the member votes on the resolution otherwise than on a poll;
  (b) any member of the company may demand a poll on that question; and
  (c) a vote or a demand for a poll by a person as proxy for a member is the same as a vote or a demand by the member.

(5) The special resolution is not effective if a demand for a poll referred to in subsection (4)(b) is refused.

Subdivision:6

Payment for Share Redemptions and Buy-backs

Section:

257

Payment for redemption or buy-back

(1) If a company redeems or buys back its own shares, the shares must be paid for on redemption or buy-back.

(2) Subject to subsections (3) and (4), a company may make a payment in respect of a redemption or buy-back of its own shares
  (a) out of the company's distributable profits;
  (b) out of the proceeds of a fresh issue of shares made for the purpose of the redemption or buy-back; or
  (c) out of capital in accordance with this Subdivision.

(3) A listed company must not make a payment out of capital in respect of a buy-back of its own shares on a recognized stock market or on an approved stock exchange under section 239.

(4) Subject to subsection (3), a payment referred to in subsection (5) may be made by a company only
  (a) out of the company's distributable profits; or
  (b) out of capital in accordance with this Subdivision.

(5) Subsection (4) applies to a payment by a company in consideration of any of the following
  (a) the company acquiring any right with respect to the buy-back of its own shares under Subdivision 4 or 5;
  (b) the variation of a contract authorized under Subdivision 5; or
  (c) the release, or variation of the release, of any of the company's obligations with respect to the buy-back of any of its own shares under Subdivision 4 or 5.

Section:

258

Special resolution for payment out of capital

(1) Subject to section 257(3), a company may make a payment out of capital in respect of the redemption or buy- back of its own shares by special resolution in accordance with this Subdivision.

(2) Subject to section 263, the payment out of capital and the redemption or buy-back must be made no earlier than 5 weeks and no later than 7 weeks after the date of the special resolution.

Section:

259

Solvency statement for payment out of capital

(1) All directors of the company must make a solvency statement that complies with Division 2 in relation to the payment out of capital.

(2) The special resolution for payment out of capital must be passed within 15 days after the date of the solvency statement.

(3) If the special resolution is proposed as a written resolution, a copy of the solvency statement must be sent to every member of the company at or before the time when the proposed resolution is sent to them.

(4) If the special resolution is proposed at a meeting, a copy of the solvency statement must be made available for inspection by members at the meeting.

(5) The special resolution is not effective if subsection (3) or (4) (as applicable) is not complied with.

Section:

260

Special resolution: exercise of voting rights

(1) If the special resolution for payment out of capital is proposed as a written resolution, a member of the company holding shares to which the resolution relates is not an eligible member for the purposes of Subdivision 2 of Division 1 of Part 12 (written resolution) in respect of those shares.

(2) If the special resolution for payment out of capital is proposed at a meeting, the resolution is not effective if
  (a) any member of the company holding shares to which the resolution relates exercises the voting rights carried by any of those shares; and
  (b) the resolution would not have been passed if the member had not done so.

(3) For the purposes of subsection (2)
  (a) a member holding shares to which the resolution relates is to be regarded as exercising the voting rights carried by those shares not only if the member votes in respect of them on a poll on the question whether the resolution should be passed but also if the member votes on the resolution otherwise than on a poll;
  (b) any member of the company may demand a poll on that question; and
  (c) a vote or a demand for a poll by a person as proxy for a member is the same as a vote or a demand by the member.

(4) The special resolution is not effective if a demand for a poll referred to in subsection (3)(b) is refused.

(5) This section does not apply to a buy-back by a listed company under a general offer in accordance with section 238.

Section:

261

Public notice of payment out of capital

(1) If a special resolution for payment out of capital is passed, the company must, on or before the date specified in subsection (2), publish a notice in the Gazette
  (a) stating that the company has approved a payment out of capital;
  (b) specifying the amount of the payment out of capital and the date of the special resolution;
  (c) stating where the special resolution and solvency statement are available for inspection; and
  (d) stating that a member of the company who did not consent to or vote in favour of the special resolution or a creditor of the company may, within 5 weeks after the date of the special resolution, apply to the Court under section 263 for cancellation of the special resolution.

(2) The date is
  (a) a date that falls on the last working day of the week after the week in which the special resolution is passed; or
  (b) if the period between the date in paragraph (a) and the date on which the special resolution is passed is less than 4 business days (both dates exclusive), a date that falls on the last working day of the week next following.

Examples

1. The special resolution is passed on 2 February of a year (Thursday). Apart from Saturdays and Sundays, all other dates in February of that year are business days. The date that falls on the last working day of the week after the week in which the special resolution is passed is 10 February (Friday) of that year. There are 5 business days between 2 February and 10 February. Therefore, the relevant notice must be published in the Gazette on or before 10 February (Friday) of that year.
2. The special resolution is passed on 30 March of a year (Friday). Both 4 April (Wednesday) and 6 April (Friday) of that year are general holidays. 2 April (Monday), 3 April (Tuesday), 5 April (Thursday) and 13 April (Friday) of that year are business days. The date that falls on the last working day of the week after the week in which the special resolution is passed is 5 April (Thursday). There are only 2 business days between 30 March and 5 April. Therefore, the relevant notice must be published in the Gazette on or before the last working day of the week next following, which is 13 April (Friday) of that year.

(3) Before the end of the week after the week in which the special resolution for payment out of capital is passed, the company must also
  (a) publish a notice to the same effect as the notice under subsection (1) in at least one specified Chinese language newspaper and at least one specified English language newspaper; or
  (b) give written notice to that effect to each of its creditors.

(4) If the company contravenes subsection (1) or (3), the company, and every responsible person of the company, commit an offence, and each is liable to a fine at level 3.

Section:

262

Inspection of special resolution and solvency statement

(1) The company must ensure that the special resolution for payment out of capital and the solvency statement made in relation to it are kept at its registered office or at a place prescribed by regulations made under section 657 for the period
  (a) beginning on the day on which the company
    (i) publishes the notice under section 261(1); or
    (ii) if earlier, first publishes the notice or gives notice to creditors under section 261(3); and
  (b) ending 5 weeks after the date of the special resolution.

(2) The company must permit a member or creditor of the company to inspect the special resolution and solvency statement without charge during business hours in that period.

(3) If the company contravenes subsection (1) or (2), the company, and every responsible person of the company, commit an offence, and each is liable to a fine at level 5 and, in the case of a continuing offence, to a further fine of $1000 for each day during which the offence continues.

(4) If the company contravenes subsection (2), the Court may by order require the company to permit an immediate inspection.

Section:

263

Application to Court by members or creditors

(1) Subject to subsection (2), a member or creditor of the company may apply to the Court, within 5 weeks after the date of the special resolution for payment out of capital, for cancellation of the resolution.

(2) A member who consented to or voted in favour of the special resolution is not entitled to apply.

(3) An application may be made on behalf of the persons entitled to apply by any one or more of them appointed in writing by all of them.

(4) If an application is made under this section
  (a) the applicant must, as soon as possible, serve the application on the company; and
  (b) the company must give the Registrar notice in the specified form of the application within 7 days after the day on which the application is served on the company.

(5) If the company contravenes subsection (4)(b), the company, and every responsible person of the company, commit an offence, and each is liable to a fine at level 3 and, in the case of a continuing offence, to a further fine of $300 for each day during which the offence continues.

Section:

264

Power of Court to adjourn proceedings

(1) The Court may adjourn proceedings on an application under section 263 so that an arrangement may be made to its satisfaction for the protection of the interests of dissentient members or dissentient creditors.

(2) The Court may give any directions and make any orders it thinks expedient for facilitating or carrying into effect any such arrangement.

Section:

265

Power of Court to confirm or cancel special resolution

(1) On an application under section 263, the Court must make an order confirming or cancelling the special resolution for payment out of capital, and may do so on any terms and conditions it thinks fit.

(2) If the Court confirms the special resolution, it may by order alter or extend any date or period of time specified—
  (a) in the special resolution; or
  (b) in any provision of this Division applying to the special resolution, the payment out of capital or the redemption or buy-back.

(3) If the Court thinks fit, the order may
  (a) provide for the company to buy back the shares of any of its members and for the reduction accordingly of the company's share capital;
  (b) provide for the protection of the interests of members or creditors of the company;
  (c) make any alteration to the company's articles that may be required as a consequence;
  (d) require the company not to make any, or any specified, alteration to its articles.

(4) If the order of the Court requires the company not to make any, or any specified, alteration to its articles, the company does not have power to make any such alteration without leave of the Court.

(5) The powers of the Court under this section do not limit its powers under section 264.

Section:

266

Company to deliver copy of order of Court to Registrar

(1) Within 15 days after the making of an order by the Court under section 265, or within any longer period ordered by the Court, the company must deliver an office copy of the order to the Registrar for registration.

(2) If the company contravenes subsection (1), the company, and every responsible person of the company, commit an offence, and each is liable to a fine at level 3 and, in the case of a continuing offence, to a further fine of $300 for each day during which the offence continues.

Subdivision:7

General Provisions

Section:

267

General prohibition on acquisition of own shares

(1) Except as provided by this Ordinance, a company must not acquire its own shares, whether by redemption, buy- back, subscription or otherwise.

(2) If a company contravenes subsection (1), an offence is committed by
  (a) the company;
  (b) every responsible person of the company; and
  (c) every non-tendering member of the company (as defined by section 705) who knowingly permits the contravention.

(3) A person who commits an offence under subsection (2) is liable
  (a) on conviction on indictment to a fine of $1250000 and to imprisonment for 5 years; or
  (b) on summary conviction to a fine of $150000 and to imprisonment for 12 months.

(4) Subject to section 236(4) and Division 2 of Part 14 (remedies for unfair prejudice to members' interests), a redemption or buy-back of shares by a company under this Division is not void only because of a failure to comply with this Division.

Section:

268

No redemption or buy-back of unpaid or partly-paid shares

A company must not redeem or buy back its own shares unless they are fully paid.

Section:

269

Effect of redemption or buy-back

(1) Shares redeemed or bought back under this Division are to be regarded as cancelled on redemption or buy-back.

(2) On redemption or buy-back of its own shares, a company must
  (a) reduce the amount of its share capital if the shares were redeemed or bought back out of capital;
  (b) reduce the amount of its profits if the shares were redeemed or bought back out of profits; or
  (c) reduce the amount of its share capital and profits proportionately if the shares were redeemed or bought back out of both capital and profits,
by the total amount of the price paid by the company for the shares.

Section:

270

Return of share redemption or buy-back

(1) A company that redeems or buys back any shares under this Division must, within 15 days after the date on which the shares are delivered to the company, deliver a return to the Registrar for registration.

(2) The return
  (a) must be in the specified form;
  (b) must state, for the shares of each class redeemed or bought back
    (i) the number of shares; and
    (ii) the date on which they were delivered to the company;
  (c) must include a statement of capital, as at the time immediately after the redemption or buy-back, that complies with section 201;
  (d) in the case of a listed company, must also state, for the shares of each class redeemed or bought back
    (i) the maximum and minimum prices paid in respect of the shares; and
    (ii) the aggregate amount paid by the company for the shares; and
  (e) in the case of a redemption or buy-back financed by a payment out of capital, must also state particulars of the payment including the date and amount of the payment.

(3) Details of shares delivered to the company on different dates and under different contracts may be included in a single return. If this is done, the amount required to be stated under subsection (2)(d)(ii) is the aggregate amount paid by the company for all the shares to which the return relates.

(4) If the company contravenes subsection (1), the company, and every responsible person of the company, commit an offence, and each is liable to a fine at level 6 and, in the case of a continuing offence, to a further fine of $2,000 for each day during which the offence continues.

Section:

271

Effect of company’s failure to redeem or buy back

(1) This section applies if, under this Division, a company
  (a) issues redeemable shares; or
  (b) agrees to buy back any of its own shares.

(2) The company is not liable in damages for any failure on its part to redeem or buy back any of the shares.

(3) Subsection (2) is without prejudice to any right of the holder of the shares other than the right to sue the company for damages for the failure.

(4) A court must not grant an order for specific performance of the terms of the redemption or buy-back if the company shows that it is unable to make a payment in respect of the redemption or buy-back out of distributable profits.

Section:

272

Effect on winding up of company’s failure to redeem or buy back

(1) This section applies if
  (a) a company
    (i) issues redeemable shares under this Division; or
    (ii) agrees to buy back any of its own shares under this Division;
  (b) the company is wound up; and
  (c) at the commencement of the winding up any of those shares have not been redeemed or bought back.

(2) The terms of the redemption or buy-back may be enforced against the company.

(3) Subsection (2) does not apply if
  (a) the terms of the redemption or buy-back provided for the redemption or buy-back to take place at a date later than that of the commencement of the winding up; or
  (b) during the period
    (i) beginning on the day on which the redemption or buy-back was to have taken place; and
    (ii) ending on the commencement of the winding up,
the company could not at any time have lawfully made a payment in respect of the redemption or buy-back out of distributable profits.

(4) Shares are to be regarded as cancelled when they are redeemed or bought back under subsection (2).

(5) The following must be paid in priority to any amount that the company is liable under subsection (2) to pay in respect of any shares
  (a) all other debts and liabilities of the company (other than any due to members in their capacity as such); and
  (b) if other shares carry rights (whether as to capital or income) that are preferred to the rights as to capital attaching to those shares, any amount due in satisfaction of those preferred rights.

(6) Subject to subsection (5), any amount payable under subsection (2) must be paid in priority to any amounts due to members in satisfaction of their rights (whether as to capital or income) as members.

(7) If, under section 264A of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap 32), a creditor of a company is entitled to payment of any interest only after payment of all other debts of the company, the company's debts and liabilities for the purposes of subsection (5) include the liability to pay that interest.

Section:

273

Power to modify by regulation

(1) The Chief Executive in Council may make regulations modifying any of the provisions of this Division with respect to
  (a) the authorization required for a company to buy back its own shares;
  (b) the authorization required for the release by a company of its rights under a contract for the buyback of its own shares, including a contingent buyback contract; and
  (c) the information to be included in a return by a company to the Registrar in relation to a share redemption or buy-back.

(2) Regulations made under this section are subject to the approval of the Legislative Council.

Division:5

Financial Assistance for Acquisition of Own Shares

Subdivision:1

Preliminary

Section:

274

Interpretation

(1) In this Division
financial assistance (資助) means
  (a) financial assistance given by way of gift;
  (b) financial assistance given
    (i) by way of guarantee, security or indemnity (other than an indemnity in respect of the indemnifier's own neglect or default); or
    (ii) by way of release or waiver;
  (c) financial assistance given
    (i) by way of a loan or any other agreement under which any of the obligations of the person giving the assistance are to be fulfilled at a time when in accordance with the agreement any obligation of another party to the agreement remains unfulfilled; or
    (ii) by way of the novation of, or the assignment of rights arising under, a loan or other agreement referred to in subparagraph (i); or
  (d) any other financial assistance given by a company if
    (i) the net assets of the company are reduced to a material extent by the giving of the assistance; or
    (ii) the company has no net assets;
liabilities (負債) includes any amount retained as reasonably necessary for the purpose of providing for any liability or loss that is
  (a) likely to be incurred; or
  (b) certain to be incurred but uncertain as to the amount or as to the date on which it will arise;
net assets (淨資產) of a company that gives any financial assistance under this Division, means the amount by which the aggregate of the company's assets exceeds the aggregate of its liabilities (taking the amount of both assets and liabilities to be as stated in the company's accounting records immediately before the financial assistance is given).

(2) In this Division
  (a) a reference to a person incurring a liability includes the person changing their financial position by making an agreement or arrangement (whether enforceable or unenforceable, and whether made on the person's own account or with any other person) or by any other means; and
  (b) a reference to a company giving financial assistance for the purpose of reducing or discharging a liability incurred by a person for the purpose of the acquisition of shares includes the company giving financial assistance for the purpose of wholly or partly restoring the person's financial position to what it was before the acquisition took place.

Subdivision:2

General Prohibition on Financial Assistance for Acquisition of Own Shares

Section:

275

Prohibition on financial assistance for acquisition of shares or for reducing or discharging liability for acquisition

(1) If a person is acquiring or proposing to acquire shares in a company, the company or any of its subsidiaries must not give financial assistance directly or indirectly for the purpose of the acquisition before or at the same time as the acquisition takes place, except as provided by this Division.

(2) If
  (a) a person has acquired shares in a company; and
  (b) any person has incurred a liability for the purpose of the acquisition,
the company or any of its subsidiaries must not give financial assistance directly or indirectly for the purpose of reducing or discharging the liability, except as provided by this Division.

(3) This section does not apply to the giving of financial assistance by a company for the purpose of the acquisition of a share in its holding company or for the purpose of reducing or discharging a liability incurred for such an acquisition if the holding company is a company incorporated outside Hong Kong.

(4) If a company contravenes subsection (1) or (2), the company, and every responsible person of the company, commit an offence, and each is liable to a fine of $150,000 and to imprisonment for 12 months.

Section:

276

Failure to comply with Division does not affect validity of financial assistance, etc.

If a company gives financial assistance in contravention of this Division, the validity of the financial assistance and of any contract or transaction connected with it is not affected only because of the contravention.

Subdivision:3

Exceptions from Prohibition

Section:

277

General exceptions

This Division does not prohibit any of the following transactions
  (a) the distribution of a company's assets
    (i) by way of dividend lawfully made; or
    (ii) in the course of winding up the company;
  (b) the allotment of bonus shares;
  (c) the reduction of a company's share capital in accordance with Division 3;
  (d) the redemption or buy-back of a company's own shares in accordance with Division 4;
  (e) anything done in accordance with a court order under Division 2 of Part 13 (arrangements and compromises);
  (f) anything done under an arrangement made under section 237 of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap 32) (power of liquidator to accept shares, etc., as consideration for sale of property of company);
  (g) anything done under an arrangement made between a company and its creditors that is binding on the creditors because of section 254 of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap 32) (arrangement, when binding on creditors).

Section:

278

Principal purpose exception

This Division does not prohibit a company from giving financial assistance for the purpose of the acquisition of a share in the company or its holding company or for the purpose of reducing or discharging a liability incurred for such an acquisition if
  (a) either
    (i) the company's principal purpose in giving the assistance is not to give it for the purpose of the acquisition of a share in the company or its holding company or for the purpose of reducing or discharging a liability incurred for such an acquisition; or
    (ii) the giving of the assistance for the purpose of the acquisition of a share in the company or its holding company or for the purpose of reducing or discharging a liability incurred for such an acquisition is only an incidental part of some larger purpose of the company; and
  (b) the assistance is given in good faith in the interests of the company.

Section:

279

Exception for money lending businesses

Subject to section 282, this Division does not prohibit the lending of money by a company in the ordinary course of business if the lending of money is part of the ordinary business of the company.

Section:

280

Exception for employee share schemes

(1) Subject to section 282, this Division does not prohibit
  (a) the giving by a company, in good faith in the interests of the company, of financial assistance for the purposes of an employee share scheme; or
  (b) the giving of financial assistance by a company for the purposes of, or in connection with, anything done by the company or another company in the same group of companies for the purposes of enabling or facilitating transactions in shares in the company or its holding company between, and involving the acquisition of beneficial ownership of those shares by
    (i) persons employed or formerly employed in good faith by that company or another company in the same group of companies; or
    (ii) spouses, widows, widowers, or minor children of persons referred to in subparagraph (i).

(2) In this section
children(子女) includes step-children, illegitimate children and children adopted in any manner recognized by the law of Hong Kong;
employee share scheme(僱員參股計劃) means a scheme for encouraging or facilitating the holding of shares in a company by or for the benefit of
  (a) persons employed or formerly employed in good faith by that company or another company in the same group of companies; or
  (b) spouses, widows, widowers, or minor children of persons referred to in paragraph (a);
minor children(未成年子女) means children who are under 18 years of age.

Section:

281

Exception for loans to employees

(1) Subject to section 282, this Division does not prohibit the making by a company of loans to its eligible employees for the purpose of enabling them to acquire fully paid shares in the company or its holding company to be held by them by way of beneficial ownership.

(2) In this section
child(子女) includes a step-child, an illegitimate child and a child adopted in any manner recognized by the law of Hong Kong;
eligible employees(合資格的僱員), in relation to a company, means persons employed in good faith by the company, other than
  (a) a director of the company;
  (b) a director's spouse;
  (c) a director's child who is under 18 years of age;
  (d) a trustee of a trust (other than an employee share scheme as defined by section 280(2) or a pension scheme)—
    (i) the beneficiaries of which include a person referred to in paragraph (a), (b) or (c); or
    (ii) the terms of which confer a power on the trustees that may be exercised for the benefit of a person referred to in paragraph (a), (b) or (c); or
  (e) a partner of a person referred to in paragraph (a), (b) or (c) or of a trustee referred to in paragraph (d).

Section:

282

Special restriction for listed companies

Section 279, 280 or 281 applies to a listed company only if
  (a) the company has net assets that are not reduced by the giving of the financial assistance; or
  (b) to the extent that those assets are reduced, the assistance is provided by a payment out of distributable profits.

Subdivision:4

Authorization for Giving Financial Assistance

Section:

283

Financial assistance not exceeding 5% of shareholders funds

(1) A company may give financial assistance for the purpose of the acquisition of a share in the company or its holding company or for the purpose of reducing or discharging a liability incurred for such an acquisition if
  (a) the directors resolve, before the assistance is given, that
    (i) the company should give the assistance;
    (ii) giving the assistance is in the best interests of the company; and
    (iii) the terms and conditions under which the assistance is to be given are fair and reasonable to the company;
  (b) on the same day that the directors pass the resolution, the directors who vote in favour of it make a solvency statement that complies with Division 2 in relation to the giving of the assistance;
  (c) the aggregate amount of the assistance and any other financial assistance given under this section that has not been repaid does not exceed 5% of the paid up share capital and reserves of the company (as disclosed in the most recent audited financial statements of the company); and
  (d) the assistance is given not more than 12 months after the day on which the solvency statement is made under paragraph (b).

(2) The resolution of the directors under subsection (1)(a) must set out in full the grounds for their conclusions as to the matters referred to in subsection (1)(a)(i), (ii) and (iii).

(3) A reference in subsection (1)(c) to any other financial assistance given under this section that has not been repaid includes the amount of any financial assistance given in the form of a guarantee or security for which the company remains liable at the time the financial assistance in question is given.

(4) Within 15 days after giving financial assistance under this section, the company must send to each member of the company a copy of the solvency statement made under subsection (1)(b) and a notice containing the following information
  (a) the class and number of shares in respect of which the assistance was given;
  (b) the consideration paid or payable for those shares;
  (c) the name of the person receiving the assistance and, if a different person, the name of the beneficial owner of those shares;
  (d) the nature, the terms and the amount of the assistance.

(5) If the company contravenes subsection (4), the company, and every responsible person of the company, commit an offence, and each is liable to a fine at level 3 and, in the case of a continuing offence, to a further fine of $300 for each day during which the offence continues.

Section:

284

Financial assistance with approval of all members

(1) A company may give financial assistance for the purpose of the acquisition of a share in the company or its holding company or for the purpose of reducing or discharging a liability incurred for such an acquisition if
  (a) the directors resolve, before the assistance is given, that
    (i) the company should give the assistance;
    (ii) giving the assistance is in the best interests of the company; and
    (iii) the terms and conditions under which the assistance is to be given are fair and reasonable to the company;
  (b) on the same day that the directors pass the resolution, the directors who vote in favour of it make a solvency statement that complies with Division 2 in relation to the giving of the assistance;
  (c) the giving of the assistance is approved by written resolution of all members of the company before the assistance is given; and
  (d) the assistance is given not more than 12 months after the day on which the solvency statement is made under paragraph (b).

(2) The resolution of the directors under subsection (1)(a) must set out in full the grounds for their conclusions as to the matters referred to in subsection (1)(a)(i), (ii) and (iii).

Section:

285

Financial assistance by ordinary resolution

(1) A company may give financial assistance for the purpose of the acquisition of a share in the company or its holding company or for the purpose of reducing or discharging a liability incurred for such an acquisition if
  (a) the directors resolve, before the assistance is given, that
    (i) the company should give the assistance;
    (ii) giving the assistance is in the best interests of the company and is of benefit to those members of the company not receiving the assistance; and
    (iii) the terms and conditions under which the assistance is to be given are fair and reasonable to the company and to those members not receiving the assistance;
  (b) on the same day that the directors pass the resolution, the directors who vote in favour of it make a solvency statement that complies with Division 2 in relation to the giving of the assistance;
  (c) the company sends to each member of the company a copy of the solvency statement made under paragraph (b) and a notice containing the following information
    (i) the nature and terms of the assistance and the name of the person to whom it will be given;
    (ii) if it will be given to a nominee for another person, the name of that other person;
    (iii) the text of the resolution of the directors;
    (iv) any further information and explanation that would be necessary for a reasonable member to understand the nature of the assistance and the implications of giving it for the company and the members;
  (d) the giving of the assistance is approved by resolution of the company before the assistance is given; and
  (e) the assistance is given
    (i) not less than 28 days after the day on which the resolution is passed under paragraph (d); and
    (ii) not more than 12 months after the day on which the solvency statement is made under paragraph (b).

(2) The notice and copy of the solvency statement must be sent to each member under subsection (1)(c) at least 14 days before the day on which the resolution under subsection (1)(d) is proposed and may accompany notice of the meeting at which the resolution will be proposed.

(3) Despite subsection (1)(e)(i), if an application is made to the Court under section 286 in relation to the giving of financial assistance under this section, the financial assistance must not be given until the application is finally determined, unless the Court orders otherwise.

(4) The resolution of the directors under subsection (1)(a) must set out in full the grounds for their conclusions as to the matters referred to in subsection (1)(a)(i), (ii) and (iii).

Section:

286

Application to Court for restraining order

(1) Within 28 days after the day on which a resolution for the giving of financial assistance is passed under section 285(1)(d), an application to the Court for an order restraining the giving of financial assistance may be made
  (a) if the company is limited by shares, by members representing at least 5% of the total voting rights of holders of shares in the company; or
  (b) in any other case, by members representing at least 5% of the members of the company.

(2) Despite subsection (1), a member who consented to or voted in favour of the resolution is not entitled to apply.

(3) An application may be made on behalf of the members entitled to apply by any one or more of them appointed in writing by all of them.

(4) An application under this section may be made only on the ground that
  (a) the giving of the assistance is neither
    (i) in the best interests of the company; nor
    (ii) of benefit to those members of the company not receiving the assistance; or
  (b) the terms and conditions under which the assistance is to be given are not fair and reasonable to
    (i) the company; and
    (ii) those members not receiving the assistance.

(5) If an application is made under this section
  (a) the applicant must, as soon as possible, serve the application on the company; and
  (b) the company must give the Registrar notice in the specified form of the application within 7 days after the day on which the application is served on the company.

(6) If the company contravenes subsection (5)(b), the company, and every responsible person of the company, commit an offence, and each is liable to a fine at level 3 and, in the case of a continuing offence, to a further fine of $300 for each day during which the offence continues.

Section:

287

Power of Court to adjourn application

(1) The Court may adjourn proceedings on an application under section 286 so that an arrangement may be made to its satisfaction for the protection of the interests of dissentient members.

(2) The Court may give any directions and make any orders it thinks expedient for facilitating or carrying into effect any such arrangement.

Section:

288

Power of Court to confirm or restrain giving of financial assistance

(1) On an application under section 286, the Court must make an order confirming or restraining the giving of financial assistance, and may do so on any terms and conditions it thinks fit.

(2) If the Court confirms the giving of financial assistance, it may by order alter or extend any date or period of time specified
  (a) in the directors ' resolution under section 285(1)(a) or the resolution of the company under section 285(1)(d); or
  (b) in any provision of this Division applying to the giving of financial assistance.

(3) If the Court thinks fit, the order may
  (a) provide for the company to buy back the shares of any of its members and for the reduction accordingly of the company's share capital;
  (b) make any alteration to the company's articles that may be required as a consequence;
  (c) require the company not to make any, or any specified, alteration to its articles.

(4) If the order of the Court requires the company not to make any, or any specified, alteration to its articles, the company does not have power to make any such alteration without leave of the Court.

(5) The powers of the Court under this section do not limit its powers under section 287.

Section:

289

Company to deliver copy of order of Court to Registrar

(1) Within 15 days after the making of an order by the Court under section 288, or within any longer period ordered by the Court, the company must deliver an office copy of the order to the Registrar for registration.

(2) If the company contravenes subsection (1), the company, and every responsible person of the company, commit an offence, and each is liable to a fine at level 3 and, in the case of a continuing offence, to a further fine of $300 for each day during which the offence continues.

Part:6

Distribution of Profits and Assets

Division:1

Preliminary

Section:

290

Interpretation

(1) In this Part
called up share capital (已催繳股本) , in relation to a company, means so much of its share capital as equals the aggregate amount of the calls made on its shares (whether or not those calls have been paid), together with
  (a) any share capital paid up without being called; and
  (b) any share capital to be paid on a specified future date under the articles, the terms of allotment of the relevant shares, or any other arrangements for payment of those shares,
and uncalled share capital (未催繳股本) is to be read accordingly;
capitalization (資本化) , in relation to a company's profits, means any of the following operations (whenever carried
out)
  (a) applying the profits in wholly or partly paying up unissued shares in the company to be allotted to members of the company as fully or partly paid bonus shares;
  (b) transferring the profits to share capital;
distribution (分派) means every description of distribution of a company's assets to its members, whether in cash or otherwise, except distribution by way of
  (a) an issue of shares as fully or partly paid bonus shares;
  (b) a redemption or buy-back of any shares in the company out of capital (including the proceeds of any fresh issue of shares), or out of unrealized profits, in accordance with Division 4 of Part 5;
  (c) a reduction of share capital by extinguishing or reducing any member's liability on any of the company's shares in respect of share capital not paid up, or by repaying paid up share capital;
  (d) a distribution of assets to the members on the company's winding up; or
  (e) financial assistance given by the company to a member under section 283, 284 or 285;
financial assistance (資助) has the meaning given by section 274(1);
financial items (財務項目) means all of the following
  (a) profits, losses, assets and liabilities; (b) provisions;
  (c) share capital and reserves (including undistributable reserves);
net assets (淨資產), in relation to a company, means the aggregate of the company's assets less the aggregate of its
liabilities;
undistributable reserves (不可分派的儲備) , in relation to a company, means
  (a) subject to subsection (2), the amount by which the company's accumulated, unrealized profits, so far as not previously utilized by capitalization, exceeds its accumulated, unrealized losses, so far as not previously written off in a reduction or reorganization of capital; or
  (b) any other reserve that the company is prohibited from distributing by an Ordinance (other than this Part) or by its articles.

(2) In paragraph (a) of the definition of undistributable reserves in subsection (1), a reference to capitalization excludes a transfer of profits of the company to its capital redemption reserve on or after 1 September 1991.

(3) In this Part
  (a) a reference to profits of any particular description is a reference to profits of that description made at any time; and
  (b) a reference to losses of any particular description is a reference to losses of that description made at any time.

(4) For the purposes of this Part, any financial statements are referential financial statements if the distribution in question is made pursuant to determinations made by reference to financial items as stated in the financial statements under section 302.

Section:

291

Realized profits and losses

(1) In this Part, a reference to realized profits or realized losses of a company is a reference to those profits or losses of the company that are regarded as realized profits or realized losses for the purpose of any financial statements prepared by the directors in accordance with principles generally accepted, at the time when the financial statements are prepared, with respect to the determination for accounting purposes of realized profits or realized losses.

(2) Subsection (1) does not affect any specific provision (whether in an Ordinance or otherwise) under which profits or losses of any description are regarded as realized.

(3) If, after making all reasonable enquiries, a company's directors are unable to determine whether or not a particular profit or loss made before 1 September 1991 is realized, they may treat the profit as realized, and the loss as unrealized, for the purposes of this Part.

Section:

292

Certain amount to be regarded as realized profit or loss

(1) For the purposes of this Part, a provision other than an amount specified in subsection (2) is to be regarded as a realized loss.

(2) The amount is one written off or retained by way of providing for a diminution in value of a fixed asset appearing on a revaluation of
  (a) all of the company's fixed assets; or
  (b) all of the company's fixed assets other than goodwill.

(3) For the purposes of subsection (2), any consideration by the directors of the value at a particular time of a fixed asset is to be regarded as a revaluation of the asset if
  (a) in the case of a listed company, the conditions specified in subsection (4)(a) and (b) are satisfied; or
  (b) in the case of any other company
    (i) where the referential financial statements are the financial statements specified in section 304, the conditions specified in subsection (4)(a) and (b) are satisfied; or
    (ii) where the referential financial statements are the financial statements specified in section 305 or 306, the condition specified in subsection (4)(a) is satisfied.

(4) The conditions are
  (a) that the directors are satisfied that the aggregate value at that time of the company's fixed assets is not less than the aggregate amount at which they are for the time being stated in the financial statements; and
  (b) that it is stated in a note to the referential financial statements that
    (i) the directors have considered the value of the company's fixed assets without actually revaluing them;
    (ii) the directors are satisfied that the aggregate value at the time of consideration of those assets is or was not less than the aggregate amount at which they are or were for the time being stated in the financial statements; and
    (iii) accordingly, by virtue of this subsection, amounts are stated in the referential financial statements on the basis that a revaluation of the company's fixed assets is to be regarded as having taken place at that time.

(5) For the purposes of this Part, if
  (a) on the revaluation of a fixed asset, an unrealized profit is shown to have been made; and
  (b) on or after the revaluation, a sum is written off or retained for depreciation of the fixed asset over a period, the amount by which the sum exceeds the projected sum in relation to the depreciation of that asset over the period is to be regarded as a realized profit made over the period.

(6) In determining whether a company has made a profit or loss on an asset for the purposes of subsection (5), the value given to the asset in the earliest available record of its value made on or after its acquisition by the company is to be regarded as the cost of the asset if
  (a) there is no record of the original cost of the asset; or
  (b) a record of the original cost of the asset cannot be obtained without unreasonable expense or delay.

(7) In subsection (5)
projected sum(預計款項), in relation to a depreciation of a fixed asset, means a sum that would have been written off or retained for depreciation if the revaluation of the asset had not been made.

(8) For the purposes of this section, an asset of a company is to be regarded as a fixed asset if it is intended for use in the company 's activities, or otherwise to be held for the purpose of the company 's activities, on a continuing basis.

Section:

293

Certain amount relating to insurance company with long term business to be regarded as realized profit or loss

(1) This section applies to a company that is an insurer and carries on long term business.

(2) For the purposes of this Part
  (a) an amount properly transferred to the statement of comprehensive income of the company from a surplus in the fund maintained by it in respect of the long term business is to be regarded as a realized profit; and
  (b) a deficit in that fund is to be regarded as a realized loss.

(3) Subject to subsection (2), any profit or loss arising in the company's long term business is to be disregarded for the purposes of this Part.

(4) In this section
  (a) a reference to a surplus in a fund maintained by a company is a reference to an excess of the assets representing the fund over the company's liabilities attributable to its long term business, as shown by an actuarial investigation; and
  (b) a reference to a deficit in such a fund is a reference to an excess of those liabilities over those assets, as
shown by an actuarial investigation.

(5) In this section
actuarial investigation(精算調查) means an investigation
  (a) made under section 18 of the Insurance Companies Ordinance (Cap 41); or
  (b) made pursuant to a requirement imposed under section 32 of that Ordinance;
insurer(保險人) has the meaning given by section 2(1) and (2) of the Insurance Companies Ordinance (Cap 41);
long term business(長期業務) has the meaning given by section 2(1) of the Insurance Companies Ordinance (Cap 41).

Section:

294

Distribution in kind: certain amount to be regarded as realized profit

If a company makes a distribution consisting of or including a non-cash asset, and any part of the amount at which the asset is stated in the referential financial statements represents an unrealized profit, that part of that amount is to be regarded as a realized profit for the purpose of determining, before or after the distribution, the lawfulness of the distribution in accordance with this Part.

Section:

295

Application of Part

(1) This Part applies in relation to a distribution made on or after the commencement date* of this Part, except a distribution specified in subsection (2).

(2) The excepted distribution is a distribution the amount of which would, had this Part applied in relation to the distribution, be determined under section 302 by reference to the financial items as stated in any financial statements for a financial year or period beginning before the commencement date* of this Part.

Section:

296

Saving for other restraints on distribution

This Part does not affect any Ordinance or rule of law, or any provision of a company's articles, restricting the sums out of which, or the cases in which, a distribution may be made.

Division:2

Prohibitions and Restrictions

Section:

297

Prohibition on certain distributions

(1) A company may only make a distribution out of profits available for distribution.

(2) For the purposes of this section, a company's profits available for distribution are its accumulated, realized profits, so far as not previously utilized by distribution or capitalization, less its accumulated, realized losses, so far as not previously written off in a reduction or reorganization of capital.

Section:

298

Listed company may only make certain distributions

(1) A listed company may only make a distribution
  (a) if the amount of its net assets is not less than the aggregate of its called up share capital and undistributable reserves; and
  (b) if, and to the extent that, the distribution does not reduce the amount of those assets to an amount less than that aggregate.

(2) A listed company must not include any uncalled share capital as an asset for the purpose of determining the amount of its net assets under this section.

Section:

299

Restriction on application of unrealized profits

A company must not apply an unrealized profit in paying up debentures or in paying up any amount unpaid on its issued shares.

Section:

300

Financial Secretary may modify or exempt provisions in relation to investment company

(1) On application by an investment company, the Financial Secretary may
  (a) modify, in relation to the company, any of the prohibitions or restrictions in section 297, 298 or 299; or
  (b) exempt the company from any of such prohibitions or restrictions.

(2) The Financial Secretary may make a modification or exemption under subsection (1) subject to any terms and conditions that the Financial Secretary thinks fit.

(3) In this section
investment company(投資公司) means a listed company whose principal business consists of investing its funds in securities, land or other assets with the aim of
  (a) spreading investment risk; and
  (b) giving its members the benefit of the results of the management of the assets.

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