“In recent years, the advancement of technology has made adoption of virtual means to hold and participate in meetings possible worldwide. Taking into account local stakeholders’ views and practices of comparable commercial centres, we propose amending the Companies Ordinance to expressly enable companies holding general meetings virtually or in hybrid mode, rather than holding meetings only at physical locations. This seeks to provide sufficient flexibility for companies to conduct corporate affairs smoothly and effectively having regard to their own circumstances and needs…” – Government Spokesperson, 25 November 2022
It has long been a convention Hong Kong company laws do not support the holding of fully virtual shareholders meetings by companies. This is due to the fact that the Hong Kong Companies Ordinance (Cap. 622) stipulates that shareholder meetings must be held in a physical location with members physically present in that location.
In line with current industry practice of fully virtual or hybrid meetings (such as use of Zoom, Microsoft Teams, etc.) in light of the COVID pandemic, the Government published in the Gazette on 25 November 2022, the Companies (Amendment) Bill 2022 (the “Bill”). The Bill aims to provide sufficient flexibility for companies to hold general meetings in various manners:
- adding a new definition of ‘virtual meeting technology’, meaning a technology that allows a person to listen, speak and vote at a meeting without being physically present at the meeting; and
- providing that a person who attends a general meeting by using the virtual meeting technology specified in the notice of the meeting is to be regarded as being present while so attending.
From the Bill, it appears that fully virtual or hybrid meetings are possible as long as the Articles of Association of a company do not prohibit it.
It is worthy to note that issues arising from the failure of virtual meeting technology and its effect on the validity of a meeting are not mentioned in the Bill.
It is envisaged that, after the Bill is passed, further guidance notes about the conduct of virtual meetings would become available, specifically from the Companies Registry and the Hong Kong Stock Exchange in relation to listed companies in Hong Kong.
The Bill is being introduced in the Legislative Council for first reading today.
The amended Ordinance will come into operation on the expiry of 3 months after the day on which it is published in the Gazette.
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This article is intended only to provide a summary of the subject covered. It does not purport to be comprehensive or to provide legal advice. No person should act in reliance on any statement contained in this publication without first obtaining specific professional advice.
