Hong Kong AGM Dispensing and Written Resolution Guide

Hong Kong AGM Dispensing and Written Resolution Guide

Introduction to Hong Kong AGM Dispensing and Written Resolution

Under the Companies Ordinance (Cap. 622), a private company may dispense with holding an annual general meeting and transact business by written resolution instead. Public companies and companies limited by guarantee remain subject to mandatory AGM requirements.

Hong Kong AGM Dispense Private Company

A private company may dispense with holding an AGM if all members entitled to attend and vote agree in writing. This agreement can be achieved through a written resolution passed by all members, or by including a provision in the company’s articles of association that waives the requirement for an AGM. No specific form is required under the Companies Ordinance (Cap. 622). The company secretary should record the decision in board minutes or a members’ resolution.

The key condition is unanimity. If even one member objects, the company must hold the meeting. The dispensation applies to the AGM only. It does not remove the requirement to hold other types of meetings, such as class meetings or meetings to remove a director.

Hong Kong Dispense with AGM

To dispense with an AGM, the company must follow one of two procedures.

Unanimous written resolution: All members entitled to vote sign a written resolution agreeing that no AGM will be held for a specified period or indefinitely. This resolution must be passed before the date on which the AGM would otherwise be due.

Articles of association provision: The company’s articles may include a clause stating that the company is not required to hold an AGM. This is common in model articles for private companies. If the articles are silent, the company can amend them by special resolution (75% majority) to add such a provision.

The company secretary should ensure that the decision is properly documented and that all members are notified. If the company later decides to resume holding AGMs, a further resolution or amendment to the articles is required.

Hong Kong Annual General Meeting Requirements

For companies that do not dispense with the AGM, the statutory requirements under Cap. 622 include:

• Timing: The first AGM must be held within 18 months of incorporation. Subsequent AGMs must be held within 15 months of the previous AGM, and in any event within nine months of the company’s financial year-end. The deadline extends to 12 months for companies with overseas operations or that are listed.
• Business: The AGM must consider the financial statements, the directors’ report, and the auditor’s report. Members may also vote on the appointment of auditors and the re-election of directors.
• Notice: At least 21 days’ written notice must be given to all members, unless the articles provide for a shorter period. The minimum for private companies is 14 days.
• Quorum: Unless the articles provide otherwise, the quorum for an AGM is two members present in person or by proxy. If the company has only one member, that member constitutes the quorum.
• Auditor: The auditor must be appointed or reappointed at the AGM. If the company has dispensed with the AGM, deal with the auditor’s appointment by written resolution.

Hong Kong Private Company AGM Exemption

A private company may be exempt from holding an AGM if it meets certain conditions. The exemption is not automatic; the company must actively decide to dispense with the AGM. The exemption applies only to private companies.

The exemption does not relieve the company of its obligation to prepare and circulate financial statements. The directors must still prepare annual financial statements and a directors’ report, and these must be sent to members within nine months of the financial year-end. The deadline is 12 months for eligible companies. Members may request a meeting to discuss the financial statements. If a member holding at least 5% of the voting rights makes such a request, the company must hold an AGM.

Written Resolution Procedure

A written resolution is a resolution passed by members without holding a meeting. Under Cap. 622, a private company may pass any resolution that could be passed at a meeting by written resolution, except a resolution to remove a director or an auditor before the end of their term.

The procedure:

1. Circulation: The company secretary circulates the resolution to all members entitled to vote. The resolution must be accompanied by a statement explaining its effect and any relevant information.
2. Signing: Members sign the resolution to indicate their approval. The resolution is passed when the required majority of members have signed it. For an ordinary resolution, a simple majority of the votes cast is required. For a special resolution, 75% of the votes cast is required.
3. Counting: Each member has one vote per share, unless the articles provide otherwise. The resolution is passed on the date when the last member signs it, provided that the required majority has been achieved.
4. Recording: Keep the signed resolution at the company’s registered office or prescribed place for at least 10 years. Enter the resolution in the minutes book.

Board Minutes and Documentation

When a private company dispenses with an AGM or passes a written resolution, the company secretary must ensure proper documentation. The board minutes should record:

• The decision to dispense with the AGM, including the date of the unanimous agreement or the relevant articles provision.
• The circulation of any written resolution to members.
• The date on which the written resolution was passed.
• The outcome of the resolution, including the number of votes for and against.

Keep the signed written resolution with the company’s statutory registers. If the company later decides to hold an AGM, record that decision and the date of the meeting in the board minutes.

Practical Compliance Steps

For a Hong Kong private company considering dispensing with the AGM:

1. Review the articles of association. Check whether the articles already permit dispensing with the AGM. If not, consider amending them by special resolution.
2. Obtain unanimous agreement. If the articles do not provide for dispensation, obtain a written resolution signed by all members agreeing to dispense with the AGM.
3. Notify the auditor. If the company has an auditor, inform them that the AGM will not be held. The auditor’s appointment must be dealt with by written resolution.
4. Prepare financial statements. Even without an AGM, the directors must prepare annual financial statements and a directors’ report. Send these to members within the statutory timeframe.
5. Maintain records. Keep the signed written resolution and any related board minutes at the registered office. Update the statutory registers.
6. Monitor member requests. If a member holding at least 5% of the voting rights requests an AGM, the company must hold one within 28 days of the request.

Companies Registry and Compliance

The Companies Registry does not require a specific form to notify that a company has dispensed with an AGM. The decision is recorded internally. The company must still file its annual return (Form NAR1) with the Companies Registry within 42 days of the return date. The annual return includes information about the company’s members, directors, and secretary. It does not require confirmation that an AGM was held.

If the company fails to hold an AGM when required, or fails to circulate financial statements, it may be subject to penalties under Cap. 622. Meet all statutory deadlines, even if the AGM is dispensed with.