英文證券卷二 HKSI Paper 2 第一章

Decisions made by the regulators can be overturned or overruled.

Globalisation and advances in technology have enabled investors to move rapidly from one market to another, arbitraging between markets, products and transactions.
The main purpose of diversification is not to increase investment returns, but to reduce risk.

Hong Kong’s status as an international financial centre is reflected in the wide range of financial products and services available in Hong Kong, developed to meet demands for investment, capital and income formation and capital raising, the facilitation of cash and capital flows, capital and investment protection (for example, hedging), safe custody and security, speculation and insurance. The financial markets also provide an avenue for price discovery and liquidity of investments.

The regulatory approach adopted by the SFC is a risk-based one, meaning that regulation is weighted towards the areas where the SFC perceives the highest risk to lie.

An expression used by the SFC to explain its approach to regulation is that it is “risk-based”. This basically means that regulation is weighted towards the areas that pose the greatest risk to the markets and the participants.

The SFC was created by law under the Securities and Futures Commission Ordinance (now repealed and subsumed in the SFO). It is independent, meaning that it is not part of the
Government machinery of the Civil Service or the ministerial system. Nevertheless, it reports to and is accountable to the Government as described in section 2 above. It is considered the securities and futures market prime regulator.

The SFC adopts a“risk-based”approach towards regulations. This basically means that regulation is weighted towards the areas that pose the greatest risk to the markets and the participants.

An expression used by the SFC to explain its approach to regulation is that it is “risk-based”. This basically means that regulation is weighted towards the areas that pose the greatest risk to the markets and the participants.

An expression used by the SFC to explain its approach to regulation is that it is “risk-based”. This basically means that regulation is weighted towards the areas that pose the greatest risk to the markets and the participants.

The SFC’s role includes the supervision of licensed corporations and their associated entities, focusing on areas where it perceives the highest risk. It is not primarily responsible for regulating international trade laws, supervising the banking system, or providing cybersecurity training.

The SFC employs a risk-based supervision approach, focusing on regulation in areas where the risks are perceived to be greatest to ensure the integrity and stability of the financial markets.

The Securities and Futures Commission (SFC) is the principal regulator of the securities industry in Hong Kong, overseeing the regulation and discipline of participants in the securities and futures markets. The SFC adopts a risk-based regulatory approach, focusing on areas perceived to have the highest risk. In contrast, HKMA is Hong Kong’s central banking institution, SEHK is a securities exchange, and HKFE is a futures exchange, making options A, B, and D incorrect.

An expression used by the SFC to explain its approach to regulation is that it is “risk-based”. This basically means that regulation is weighted towards the areas that pose the greatest risk to the markets and the participants.

The principal regulator of the securities industry in Hong Kong is the SFC, which assumes responsibility for front-line regulation and discipline of participants trading on the securities and futures exchanges and also of other securities intermediaries.

The Securities Commission option is wrong, the correct name is Securities and Futures Commission.

There are fewer opportunities for cooperation between the SFCand the tax bureau than other agencies.

Hong Kong Financial Regulatory Regime is able to address new and complex financial products.

Frequent Intervention is not an objective of financial regulators in Hong Kong. Providing Investment advice is not a job that regulators will do, it’s the job of intermediaries.

Unit trusts/mutual funds (I), equity-linked instruments(II), and virtual assets regarded as securities (III) are traded on SEHK. However, Exchange-traded futures (IV) are traded on HKFE.

Exchange-traded futures are traded on the Hong Kong Futures Exchange Limited (HKFE) and not on The Stock Exchange of Hong Kong Limited (SEHK), making option D the correct answer.

Equities (I), bonds and other debt instruments (II), and equity-linked instruments (III) are securities-related products under the licensing regime. However, Standard futures contracts (IV) are not regarded as securities-related products.

Advising a trust is not a securities and futures service in Hong Kong.

All of these services fall under Hong Kong’s securities and futures services.

Financial intermediaries must be compensated to be classified as providers of financial transactions and services. Establishing a tutorial company offers educational services, not financial ones. Managing assets without compensation doesn’t fall under financial services. Therefore, signing a rental agreement for a bank, which is not a financial contract but a real estate contract, is not considered a financial intermediary service. However, loaning money to others and charging interest for the principal is a financial service that involves compensation for a financial transaction.

Providing loans and collecting interest is money lending and is a regulated financial intermediary activity.

Intermediaries are providers of securities and futures investment products and services in Hong Kong. Institutional investors are participants but not providers.

In financial markets, providers of financial products and services include principals and intermediaries. Fund managers, stockbrokers, and independent financial advisers are all intermediaries. Auditors are professionals supporting financial markets.

The principal service providers in the securities investment and advising business are:
(a) intermediaries who are participants of the SEHK;
(b) intermediaries who act for foreign securities companies;
(c) underwriters;
(d) fund and portfolio managers;
(e) approved agents who introduce clients to exchange participants or other brokers but do not handle client assets;
(f) corporate finance advisers;
(g) advisers to retail investors;
(h) virtual asset service providers;
(i) financial planners for collective investment schemes (“CISs”);
(j) securities analysts;
(k) licensed banks;
(l) trust companies;
(m) securities margin financiers;
(n) support service providers: lawyers, accountants, auditors and valuers;
(o) listed companies;
(p) financial journalists and radio broadcasters;
(q) market operators who provide exchange and/or clearing functions for transactions in securities, i.e. HKEX, including the SEHK and Hong Kong Securities Clearing Company Limited;
(r) The Investor Compensation Company Limited (“ICC”): the ICC is an independent company recognised by the SFC for dealing with investor compensation matters;
(s) ATS providers: provide by means of electronic facilities, a trading mechanism for securities and futures contracts other than the operations of a recognised exchange company or a recognised clearing house (at the moment this would only cover the SEHK, HKFE and their related clearing houses), for example, trade confirmation and matching systems provided by brokers;
(t) exchanges from outside Hong Kong: there are dealers in Hong Kong who provide local investors with access to overseas exchanges;
(u) share registrars (who have formed a Federation of Share Registrars, with the approval of the SFC) providing share registry services to issuers of listed securities; and
(v) nominee companies that hold client assets of intermediaries.

ATS providers offer electronic facilities that include both trading and clearing mechanisms for securities and futures contracts, which are distinct from the operations of recognized exchange companies or recognized clearing houses.

Common consequences of deficit in corporate governance standards:
I. Insider trading and other forms of market misconduct
II. Misfeasance, fraud, and misconduct by directors, managers, and other staff causing losses to the company or shareholders
IV. The price of the connected transaction deviates from the market price, causing losses to the company and shareholders

In furtherance of these aims, the SFC conducts regular inspections of licensed corporations which may be conducted either on-site or via a request for information to be provided. The maintenance of proper documentation is critical in this regard.

In order to facilitate compliance with applicable legal and regulatory requirements (in Hong Kong and, where applicable, in overseas jurisdictions), there is a growing tendency to adopt a detailed compliance manual which sets out the securities dealer’s or adviser’s policies and procedures in relation to matters of regulatory concern. In many cases, a dedicated compliance officer is engaged to oversee adherence to the manual, maintain close contact with the regulators and keep abreast of regulatory developments affecting the securities dealer’s or adviser’s business.

All of these functions are essential as stated in different regulations and guidelines such as the Code of Conduct, the FMCC, AMLO, PDPO, and others.

Senior management must provide the leadership and drive to promote, encourage and enforce, if necessary, good compliance practices. It must establish:
(a) good line and reporting structures;
(b) clearly defined functions and responsibilities;
(c.) effective communications;
(d) appropriate transparency and disclosure practices.

A good corporate-governance is not related to former employees.

Corporate governance has been defined in various ways. It can be seen as primarily concerned with the proper relationship between a company’s management, its board and its shareholders, and possibly also its stakeholders (i.e. groups who have a stake in the healthy existence of a corporation, such as employees, creditors and customers). The governance issue is therefore also concerned with the system by which companies are directed and controlled.
The activities of intermediaries frequently concern listed corporations. Accordingly, in addition to considering their own regulatory and corporate governance position, intermediaries need to be aware of the wider impact of corporate governance on their clients and the market. It is now generally accepted that investors attach considerable importance to corporate governance when assessing the value of a stock, and that markets which exhibit a higher degree of good corporate governance are regarded as more competitive in the international arena.

The Organisation for Economic Co-operation and Development (“OECD”) has issued a set of core principles of corporate governance practices to include fairness, transparency, accountability and responsibility. Leadership is not one of those principles.

Corporate governance has been defined in various ways. It can be seen as primarily concerned with the proper relationship between a company’s management, its board and its shareholders, and possibly also its stakeholders (i.e. groups who have a stake in the healthy existence of a corporation, such as employees, creditors and customers).

Corporate governance has been defined in various ways. It can be seen as primarily concerned with the proper relationship between a company’s management, its board and its shareholders, and possibly also its stakeholders (i.e. groups who have a stake in the healthy existence of a corporation, such as employees, creditors and customers).

A key objective of good governance in any corporate business is to avoid management taking improper advantage of its position to benefit itself in preference to the legitimate interests of the company. Having regard to the general concepts set out by the OECD, some of the ways a company may improve its governance are as follows:
(a) installing appropriate checks and balances.
(b) increasing transparency and disclosure to shareholders, stakeholders and the public;
(c) installing strong protective structures for minority shareholders, creditors and other lenders.
(d) identifying and penalising corporate wrongdoing.

A key objective of good governance in any corporate business is to avoid management taking improper advantage of its position to benefit itself in preference to the legitimate interests of the company. Having regard to the general concepts set out by the OECD, some of the ways a company may improve its governance are as follows:
(a) installing appropriate checks and balances, such as separating the functions of Chairman and CEO; appointment of independent non-executive directors; establishment of independent audit committees; setting up committees to control the remuneration and benefits of directors and senior management.

The essence of corporate governance is to enhance transparency and check and balance. The powers of the management should be limited, therefore, installation of check and balances and limiting the management’s remuneration are good practices.

It’s not required to protect the interests of the management.

A key objective of good governance in any corporate business is to avoid management taking improper advantage of its position to benefit itself in preference to the legitimate interests of the company.

Having regard to the general concepts set out by the OECD, some of the ways a company may improve its governance are as follows:
(a) installing appropriate checks and balances, such as separating the functions of the chairman and chief executive officer, appointment of independent non-executive directors, establishment of independent audit committees, and setting up committees to control the remuneration and benefits of directors and senior management;
(b) increasing transparency and disclosure to shareholders, stakeholders and the public;
(c.) adopting international accounting and auditing standards;
(d) installing strong protective structures for minority shareholders, creditors and other lenders.
(e) identifying and penalising corporate wrongdoing.

A key objective of good governance in any corporate business is to avoid management taking improper advantage of its position to benefit itself in preference to the legitimate interests of the company. Having regard to the general concepts set out by the OECD, some of the ways a company may improve its governance are as follows:
(a) installing appropriate checks and balances.
(b) increasing transparency and disclosure to shareholders, stakeholders and the public;
(c) adopting international accounting and auditing standards;
(d) installing strong protective structures for minority shareholders, creditors and other lenders.

Disclosure requiremetns are in place to enhance transperancy

A key objective of good governance in any company is to avoid management taking improper advantage of its position to benefit itself in preference to the legitimate interests of thecompany.
Good Corporate governance are not required to be responsible for the interest of Former Employees.

Good corporate governance should separate the functions of Chairman and CEO.

The Organisation for Economic Co-operation and Development offers the concept that companies can improve the level of corporate governance by the following methods:
I. Distinguish between the Chief Executive Officer and the Chairman
II. Enhance transparency disclosure to shareholders and stakeholders
III. Establish a compensation committee to monitor senior management compensation
IV. Establish a strong protection structure for minority shareholders, creditors, or other stakeholders
V. Establish an independent audit committee
VI. Identify business misconduct
VII. Adopt international accounting and auditing standards

The SFC may enquire into or investigate suspected breaches of the SFO and any subsidiary legislation, codes, and guidelines.
Failure to pay license fees on time is a violation of the Securities and Futures (Fees) Rules；
Failure to tell clients where their money is going is a breach of the Securities and Futures (Client Money) Rules.
So options I and II are correct.

The SFC can conduct supervisory inspections on an intermediary or an associated entity of an intermediary.

The SFC may authorise an employee (or another person with the consent of the Financial Secretary) to carry out an investigation. The person so authorised may investigate any person. A person under investigation is required to:
(a) provide documents and explanations;
(e.) make a statutory declaration that he is unable to provide the evidence for reasons to be stated, if such is the case.
The SFC may apply to the court to order a person who does not comply with requirements made by the authorised person or investigator under relevant provisions to do so (s. 185, SFO).

Under the SFO, the SFC is authorized to investigate any person and to require assistance in these investigations.A person is guilty of an offense if, without reasonable excuse, they fail to comply with the requests of an investigator, or if they provide a response that is false or misleading. Such offenses can lead to criminal prosecution.

The SFC has the power to investigate any person in connection with suspicions of malpractice, fraud, or other market misconduct or situations where the interest of the investing public may be jeopardised. It can require the person under investigation to provide information during such investigations. This includes retail investors like Miss Ko. If the person under investigation is unable to provide evidence, they must make a statutory declaration stating the reasons for their inability.

A person commits an offence if he provides to the SFC (whether in applications or in other circumstances) false or misleading information as to a material particular knowingly or recklessly as to whether it is false or misleading (ss. 383 and 384, SFO).

Six months is the longest period permitted for an order to retain documents established by a regular warrant. Any period beyond that must be requested.

An employee of the SFC, an authorised person or an investigator may, in appropriate circumstances, apply to a magistrate for the issue of a warrant:
(a) authorising specified persons, a police officer and such other persons as may be necessary to assist in the execution of the warrant to enter specified premises, if necessary by force, at any time within seven days;
(b) requiring any person on the premises to produce any relevant documents;
© prohibiting any person to erase or alter or remove any relevant documents; and
(d) authorising the specified persons to:
(i) search for, seize and remove any relevant documents

Breaches of the SFO and subsidiary legislation are legal offences and will be investigated by the SFC and enforcement action taken. A failure on the part of an intermediary or its representative to comply with a code of conduct is not a breach of law and does not by itself constitute an offence under the law.

The SFO is the principal legislative document governing the securities market in Hong Kong.

These are some of the Major Subsidiary Legislation including:
1.1 Securities and Futures (Financial Resources) Rules
1.2 Securities and Futures (Client Securities) Rules
1.3 Securities and Futures (Client Money) Rules
1.4 Securities and Futures (Keeping of Records) Rules
1.5 Securities and Futures (Contract Notes, Statements of Account and Receipts) Rules
1.6 Securities and Futures (Accounts and Audit) Rules,
plus many others.

Part VII empowers the SFC to make subsidiary legislation (s. 168, SFO) and/or codes (s. 169, SFO).

The SFO grants the SFC powers to make detailed rules relating to:
(a.) their financial resources;
(b.) the handling of client money and other client assets;
(c.) the keeping of accounts and records; and
(d.) auditing matters.

Codes and guidelines do not have the force of law and are not legally enforceable.
However, the SFC is able to penalise licensed or registered persons breaching the codes and guidelines by applying the blanket principle that a breach of these may impugn the licensed or registered person’s fitness and properness to remain licensed or registered.

Codes and guidelines do not have the force of law and are not legally enforceable.
However, the SFC is able to penalise licensed or registered persons breaching the codes and guidelines by applying the blanket principle that a breach of these may impugn the licensed or registered person’s fitness and properness to remain licensed or registered.

The SFC may enquire into or investigate suspected breaches of the SFO and any subsidiary legislation, codes and guidelines:
i) Breaches of the SFO and subsidiary legislation are legal offenses and will be investigated by the SFC and enforcement action taken; the SFC may refer serious cases to law enforcement agencies such as the Commercial Crimes Bureau of the Hong Kong Police Force or the Independent Commission Against Corruption (“ICAC”) for investigation
and action.
Ii) The SFC may also apply to the courts for an injunction to restrain a person from dealing with his assets or carrying on all or a part of his business if it can make a case to show that it is in the public interest to issue such an order.
Iii) Persons prejudiced by the perpetration of market misconduct may take civil action against the wrongdoer through the courts to obtain redress. The SFO has provisions for the findings of the Market Misconduct Tribunal to be admissible in evidence in private civil
actions.
Iv) Codes and guidelines do not have the force of law and are not legally enforceable. However, the SFC can penalize licensed or registered persons breaching the codes and guidelines by applying the blanket principle that a breach of these may impugn the
licensed or registered person’s fitness and properness to remain licensed or registered.
V) The SFC has the power to reprimand (privately or publicly), to fine, and to suspend or revoke a license or registration concerning all or any part of the regulated activities specified on the license or certificate of registration.

The FMCC applies to intermediaries conducting discretionary management of CISs (whether or not the CISs are authorised by the SFC) and their representatives (“Fund Managers”).

The SFO also empowers the SFC to issue codes, guidelines and guidance notes. These do not have the force of law and do not override the provisions of any applicable law. However, a
failure to follow the spirit of the codes, guidelines and guidance notes may reflect adversely on the fitness and properness of licensed or registered persons to continue to be so licensed or
registered.

Option I included in the question is not a real code, the other three do exist and apply to asset managers.

Codes and guidelines do not have the force of law and are not legally enforceable. However, the SFC is able to penalise licensed or registered persons breaching the codes and guidelines by applying the blanket principle that a breach of these may impugn the licensed or registered person’s fitness and properness to remain licensed or registered.

A compulsory winding-up is ordered by the court, which will appoint a liquidator; a voluntary winding-up is started by the members. If the members declare that the company can meet its debts within one year, there will be a members’ voluntary winding-up; if not, it will be a creditors’ voluntary winding-up with a committee of inspection that will supervise the process.

Model articles of association for private companies, public companies and guarantee companies are provided in the Companies (Model Articles) Notice. Model articles of private
companies and public companies consist broadly of four parts including matters relating to:
(a) officers, including powers, duties, appointments and disqualifications of directors, appointments and removal of company secretaries;
(b) members, including meetings and voting procedures;
© capital, such as share capital, rights and dealings with shares and dividends; and
(d) miscellaneous provisions such as communications to and by the company and administrative arrangements.

Model articles of association for private companies, public companies and guarantee companies are provided in the Companies (Model Articles) Notice. Model articles of private companies and public companies consist broadly of four parts including matters relating to:
(a) officers, including powers, duties, appointments and disqualifications of directors, appointments and removal of company secretaries;
(b) members, including meetings and voting procedures;
© capital, such as share capital, rights and dealings with shares and dividends; and
(d) miscellaneous provisions such as communications to and by the company and administrative arrangements.

Model articles of association for private companies, public companies and guarantee companies are provided in the Companies (Model Articles) Notice. Model articles of private companies and public companies consist broadly of four parts including matters relating to:
(a) officers, including powers, duties, appointments and disqualifications of directors, appointments and removal of company secretaries;
(b) members, including meetings and voting procedures;
© capital, such as share capital, rights and dealings with shares and dividends; and
(d) miscellaneous provisions such as communications to and by the company and administrative arrangements.

Company meetings of shareholders are very important as they provide the only opportunity for shareholders to exercise any control over the affairs of the company or take part in its operations.

Company meetings of shareholders are very important as they provide the only opportunity for shareholders to exercise any control over the affairs of the company or take part in its operations.

A company is required by the CO to hold an annual general meeting of shareholders (s. 610, CO). Companies are permitted to dispense with the requirement to hold annual general meetings by passing a written resolution or a resolution at a general meeting with unanimous shareholders’ consent.

Which of the following can call a meeting other than the annual general meetings?
I. Shareholders
II. Directors
III. Court

Other general meetings may be requested by directors, shareholders and the court.

Unless exempted, companies must hold an annual general meeting within six months (for public companies) or nine months (for private companies or guarantee companies) after the end of their accounting reference period by reference to which its financial year is determined.

In Hong Kong, a company must hold its first Annual General Meeting (AGM) within 18 months of its incorporation. This allows new companies some flexibility to organize their initial statutory meeting without the immediate annual pressure. After the first AGM, subsequent AGMs must be held every calendar year, and the interval between the AGM and the next must not exceed 15 months, as stated previously.

The usual audit report does not give much opportunity for questions as it is normally in a standard format stating that the accounts present a “true and fair view” of the company’s financial position, unless something is seriously wrong, when the auditors will include a qualification in the report.

The business of an annual general meeting includes the consideration of the annual accounts, the declaration of dividends, the election of directors to replace retiring ones, and the appointment of auditors.

According to the Companies Ordinance, all the mentioned items require formal resolutions at a members’ meeting, rather than being accomplished merely by issuing a circular and obtaining member signatures. This includes the removal of a director or an auditor before their term has ended, reduction of share capital, and amendments to the objects or articles of association, all of which need to be resolved through a meeting to ensure transparency and fairness in the company’s decision-making process.

Under s. 548, CO, resolutions may be passed by circularisation and signed by all members.

Under s. 548, CO, resolutions may be passed by circularisation and signed by all members except for:
(b) the removal of a director before his term expires.

Under s. 548, CO, resolutions may be passed by circularisation and signed by all members except for:
(a) the removal of auditors before the expiration of their term of office; or
(b) the removal of a director before his term expires.
These must be put to members at a general meeting as ordinary resolutions.

Removal of auditors and directors can be done by ordinary resolution.

Reduction of share capital, liquidation, amendment of articles of association all require special resolutions.

Under Section 548 of the Companies Ordinance, resolutions may be passed by circulating them to all members and obtaining their signatures, except for the removal of auditors before the expiration of their term of office and the removal of a director before his term expires. These must be presented to members at a general meeting as ordinary resolutions.

A special resolution is one passed by at least 75% of members at a general meeting (voting in person or, where proxies are allowed, by proxy).

Examples of matters which need special resolutions are:
(a) reduction of share capital;
(b) winding up of the company voluntarily or by court; and
(c) alteration of objects, articles of association (for companies formed and registered under the NCO) and conditions in memoranda of association that could have been included in the articles of association (for existing companies).

A special resolution is one passed by at least 75% of members at a general meeting (voting in person or, where proxies are allowed, by proxy), of which not less than 14 days’ notice specifying the intention to pass the resolution has been given. Examples of matters which need special resolutions are:
(a) reduction of share capital;
(b) winding up of the company voluntarily or by court; and
© alteration of objects, articles of association (for companies formed and registered under the NCO) and conditions in memoranda of association that could have been included in the articles of association (for existing companies).
A copy of a special resolution must be lodged with the Registrar of Companies within 15 days of it being passed.

A copy of a special resolution must be lodged with the Registrar of Companies within 15 days of it being passed.

Examples of matters which need special resolutions are:
(a) reduction of share capital;
(b) winding up of the company voluntarily or by court; and
(c) alteration of objects, articles of association (for companies formed and registered under the NCO) and conditions in memoranda of association that could have been included in the articles of association (for existing companies).

Examples of matters which need special resolutions are:
(a) reduction of share capital;
(b) winding up of the company voluntarily or by court; and
(c) alteration of objects, articles of association (for companies formed and registered under the NCO) and conditions in memoranda of association that could have been included in the articles of association (for existing companies).

A special resolution is one passed by at least 75% of members at a general meeting (voting in person or, where proxies are allowed, by proxy), of which not less than 14 days’ notice
specifying the intention to pass the resolution has been given.

Examples of matters which need special resolutions are:
(a) reduction of share capital;
(b) winding up of the company voluntarily or by court; and
(C) alteration of objects, articles of association (for companies formed and registered under the CO) and conditions in memoranda of association that could have been included in
the articles of association (for existing companies).

Special resolutions should have a 14-day notice period.

A special resolution is one passed by at least 75% of members at a general meeting (voting in person or, where proxies are allowed, by proxy), of which not less than 14 days’ notice
specifying the intention to pass the resolution has been given.

A special resolution is one passed by at least 75% of members at a general meeting (voting in person or, where proxies are allowed, by proxy), of which not less than 14 days’ notice specifying the intention to pass the resolution has been given.

An ordinary resolution is a resolution which may be passed by a simple majority of those present and voting at a meeting of members. Notice must be given.

An ordinary resolution is a resolution which may be passed by a simple majority of those present and voting at a meeting of members. Notice must be given.

These include:
(a) changes to articles of association and company name;
© issue of shares at a discount;
(d) alteration of capital including reduction.

These include:
(h) removal of directors;
(i) disposal of company assets;
(j) approval of payments for loss of office

The CO permits the formation of a company by one or more persons (s. 67, CO). The CO also provides that one member
constitutes a quorum for a meeting of a company having only one member.

There are provisions in the NCO and in Companies (Model Articles) Notice which enable a
company to vary the rights of the holders of a class of shares. However, if a variation is being processed, the holders of at least 10% of the total voting rights of the shares in that class may petition the court to have the variation cancelled if it is against their interests.

When the rights of the shareholders are changed, as long as there are more than 10% of the voting rights, a petition can be filed with the court to cancel the change.

The court will not generally interfere in internal management matters or where the company can deal with the matter by calling a meeting. This is the principle of majority power.

The court will not generally interfere in internal management matters or where the company can deal with the matter by calling a meeting. This is the principle of majority power.

To ensure that the principle of majority power is not abused, certain safeguards are provided under the CO to protect the interests of minority shareholders:
(a) a special resolution is required for certain matters.
(b) Court sanction is required where the decision of the company will directly affectcreditors.
(c) Dissenting members may appeal to the court to have certain resolutions cancelled.
(d) Members with 5% of the paid-up share capital which carries voting rights may request the directors to call a general meeting; if the directors will not, the members may do so.
(e) 100 members or 10% of the holders of the issued shares may ask the Financial Secretary to appoint an investigator into the company’s affairs.
(f) A member may apply to the court for an order if he considers that the affairs of the company are being conducted in a manner prejudicial to the interests of the members generally or of some part of the members.
(g) A member may petition for a winding up.

To ensure that this principle is not abused, certain safeguards are provided under the NCO to protect the interests of minority shareholders:
(c.) Dissenting members may appeal to the court to have certain resolutions cancelled.
(e.) 100 members or 10% of the holders of the issued shares may ask the Financial Secretary to appoint an investigator into the company’s affairs.
On the other hand,
(d) Members with 5% of the paid-up capital which carries voting rights may request the directors to call a meeting; if the directors will not, the members may do so.
Sharon cannot call a meeting on her own.

To ensure that this principle is not abused, certain safeguards are provided under the CO to protect the interests of minority shareholders:
(c.) Dissenting members may appeal to the court to have certain resolutions cancelled.
(d) Members with 5% of the paid-up capital which carries voting rights may request the directors to call a meeting; if the directors will not, the members may do so.
(e.) 100 members or 10% of the holders of the issued shares may ask the Financial Secretary to appoint an investigator into the company’s affairs.

Dissenting members may appeal to the court to have certain resolutions cancelled.

To ensure that this principle is not abused, certain safeguards are provided under the NCO to protect the interests of minority shareholders:
(c.) Dissenting members may appeal to the court to have certain resolutions cancelled.
(d) Members with 5% of the paid-up capital which carries voting rights may request the directors to call a meeting; if the directors will not, the members may do so.
(e.) 100 members or 10% of the holders of the issued shares may ask the Financial Secretary to appoint an investigator into the company’s affairs.
(g) A member may petition for a winding up.

A member may apply to the court for an order if he considers that the affairs of the company are being conducted in a manner prejudicial to the interests of the members generally or of some part of the members.

To ensure that this principle is not abused, certain safeguards are provided under the CO to protect the interests of minority shareholders:
(c.) Dissenting members may appeal to the court to have certain resolutions cancelled.
(d) Members with 5% of the paid-up capital which carries voting rights may request the directors to call a meeting; if the directors will not, the members may do so.
(e.) 100 members or 10% of the holders of the issued shares may ask the Financial Secretary to appoint an investigator into the company’s affairs.
(f) A member may apply to the court for an order if he considers that the affairs of the company are being conducted in a manner prejudicial to the interests of the members generally or of some part of the members.

To ensure that this principle is not abused, certain safeguards are provided under the NCO to protect the interests of minority shareholders:
(a) As seen in section 3.17 above, a special resolution is required for certain matters.
(b) Court sanction is required where the decision of the company will directly affect creditors.
© Dissenting members may appeal to the court to have certain resolutions cancelled.
(g) A member may petition for a winding up.

Measures to protect minority shareholders include:
1. Members with 5% of the voting rights may request the directors to call a general meeting. If the directors refuse, they can convene a general meeting on their own.
2. 100 members or 10% of the holder of the issued shares can request the Financial Secretary to investigate the company’s affairs
3. Dissenting members can appeal to the court to revoke certain company resolutions
4. Any member may petition the court for the winding-up of the company.
5. If a member believes that their interests are impaired, they can apply to the court for an order

The court may intervene to allow an individual member or members to bring an action:
(a) to enforce some personal rights (a personal action);
(b) where a right has been infringed which affects all or a number of members in a similar way (a joint action); or
(c) on behalf of the company where misconduct has been committed against the company, for example by a director of the company or a third party (a derivative action).

The CO merely defines a director as including a person who occupies the position of director, by whatever name he is called. The CO itself refers very little to directors but there is more about them in Companies (Model Articles) Notice. The CO says that every company (not being a private company) must have at least two directors (s. 453, CO) and every private company must have at least one director (s. 454, CO).

The CO merely defines a director as including a person who occupies the position of director, by whatever name he is called. The CO itself refers very little to directors but there is more about them in Companies (Model Articles) Notice. The CO says that every company (not being a private company) must have at least two directors (s. 453, CO) and every private company must have at least one director (s. 454, CO). The directors must be appointed by the members acting in general meeting.

Every private company is required to have at least one director, and at least one director must be a natural person.

Every private company (other than one within the same group as a listed company) is required to have at least one director who is a natural person.

Every private company (other than one within the same group as a listed company) is required to have at least one director who is a natural person.

Shadow directors are “persons in accordance with whose directions or instructions (excluding advice given in a professional capacity) the directors, or a majority of the directors, of a body corporate are accustomed to act”.

Shadow directors are “persons in accordance with whose directions or instructions (excluding advice given in a professional capacity) the directors, or a majority of the directors, of a body corporate are accustomed to act”.

An officer, according to the CO, includes a director, manager or company secretary.

Persons to be appointed directors must meet the following requirements:
(a) They must be at least 18 years of age.
(b) They must not be undischarged bankrupts.
(c.) They must not be disqualified by court order.

Persons to be appointed directors must not be disqualified by a court order. The four primary grounds for such an order include conviction for an indictable offence involving fraud, dishonesty, or related to the formation or management of companies; persistent default concerning the Companies Ordinance or when acting as a liquidator or receiver; committing fraud in relation to company matters or engaging in fraudulent trading; and being deemed an unfit director while serving in an insolvent company.

Persons to be appointed directors must meet the following requirements:
(a) They must be at least 18 years of age.
(b) They must not be undischarged bankrupts.
(c) They must not be disqualified by court order; the four principal grounds for such an order being:
(i) conviction of an indictable offence for fraud or dishonesty or relating to forming or operating companies;
(ii) persistent default in relation to the CO or in acting as a liquidator or receiver;
(iii) fraud in relation to company matters or fraudulent trading; or
(iv) a finding of being unfit during directorship of an insolvent company.

Persons to be appointed directors must meet the following requirements:
(c.) They must not be disqualified by court order.
(i) conviction of an indictable offence for fraud or dishonesty or relating to forming or operating companies;
(ii) persistent default in relation to the CO or in acting as a liquidator or receiver;
(iii) fraud in relation to company matters or fraudulent trading; or
(iv) a finding of being unfit during directorship of an insolvent company.
Fraud and the other disqualifications apply to directors and shadow directors (e.g. see section 3.5, Topic 7, which describes disqualification orders made by the Market Misconduct Tribunal (“MMT”) preventing persons committing market misconduct from being directors of companies).