Restricting Corporate Directorship in Private Companies
Written by: Asia Pacific Business Center
Modified on: 6 February 2014
The New Companies Ordinance (“the new CO”) is to commence operation on March 2014. Under the new CO, every private company is required to have at least one director who is a natural person, to enhance transparency and accountability.
Pursuant to the new CO, the Registrar of Companies may directs a company to appoint a director who is a natural person in compliance with the requirement. If a company fails to comply with the direction, the company and every responsible person of the company commit an offence, and each is liable to a fine of $100,000 and for a continuing offence, a further fine of $2,000 for each day during the period.
To be Considerate, there will be a grace period of 6 months after the commencement date of the new CO for the companies to comply with the new requirement. However, the appointments of new directors should be reported to the Registrar of Companies in the specified form within 15 days.