In the past, the Hong Kong Companies Ordinance (Cap. 622) (“CO”) did not provide any provisions for companies to hold fully virtual General Meetings or hybrid meetings combining virtual and physical attendance.
According to the Companies Ordinance (CO), a company incorporated in Hong Kong is required, unless exempted, to hold an annual general meeting (“AGM”) within a prescribed timeframe. Additionally, general meetings other than the AGM may be held as necessary.
Change to the Companies Ordinance
However, on January 27, 2023, the Companies Amendment Ordinance 2023 (“Amendment Ordinance”) was gazetted and became effective on April 28, 2023. This Amendment Ordinance now allows companies incorporated in Hong Kong to conduct fully virtual general meetings or adopt a hybrid format.
The purpose of the Amendment Ordinance is to modernize the CO and the Companies (Model Articles) Notice (Cap. 622H) (“Model Articles”) to explicitly address the scenario of Hong Kong companies holding fully virtual general meetings without the need for physical presence, as well as hybrid general meetings.
The newly introduced section 583A of the CO allows companies to hold general meetings in three ways:
- At a physical venue (referred to as a physical meeting).
- Through virtual meeting technology (referred to as a fully virtual meeting).
- In a combination of a physical venue and virtual meeting technology (referred to as a hybrid meeting).
Under section 584 of the amended CO, companies are permitted to hold general meetings at two or more locations using Virtual Meeting Technology. This technology enables members who are not physically present at the same place to listen, speak, and vote during the meeting.
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Virtual Meeting Technology is defined as “a technology that allows a person to listen, speak, and vote at a meeting without being physically present.” Therefore, Hong Kong companies now have the flexibility to hold general meetings using Virtual Meeting Technology only, at a physical venue only, or in a hybrid mode, combining both virtual and physical methods.
The cases in which changing the Articles of Association are necessary
If a Hong Kong company’s Articles of Association merely state a place or places for conducting general meetings or specify the physical venue in the notice of a general meeting, there is no need to amend the Articles to hold Virtual Meetings. However, amendments to the Articles of Association are required if they:
- Explicitly prohibit the holding of a general meeting via Virtual Meeting Technology.
- Mandate that general meetings be held exclusively at a physical venue.
When deciding on the most appropriate meeting mode, companies must consider convening a valid meeting in compliance with the law and their articles, as well as whether a physical meeting remains the most suitable option or if a fully virtual or hybrid general meeting can enhance member engagement and maximize participation.
In conclusion, the Amendment Ordinance brings a significant change to the CO, enabling Hong Kong companies to embrace the benefits of virtual and hybrid general meetings. This modernization will provide companies with increased flexibility and the opportunity to adapt to evolving business practices while ensuring compliance with the relevant regulations.
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