Form NSC16 Hong Kong Notice of Variation of Rights of a Class of Members

Purpose of Form NSC16 Hong Kong

Form NSC16 Hong Kong is the statutory notice filed with the Companies Registry when a company varies the rights attached to a class of members. The Form NSC16 Hong Kong must be submitted whenever a company, including a company limited by guarantee, alters the rights of any class of its members under the Companies Ordinance (Cap. 622). This form serves as the formal record of the variation, ensuring the Registry has an up-to-date view of the company's class structure.

The form applies to both companies limited by shares and companies limited by guarantee. For a company limited by shares, variation of rights typically concerns different classes of shares. For a company limited by guarantee, variation may involve different classes of members with distinct rights under the company constitution.

When Form NSC16 Must Be Filed

The obligation to file Form NSC16 arises when a company has completed the process of varying the rights of a class of members. This occurs after the variation has been approved by the required procedures set out in the company's articles of association or in Part 7 of the Companies Ordinance (Cap. 622). The return date for filing is 15 days from the date the variation takes effect. The form must be delivered to the Companies Registry within that period.

Variation of Members Rights Hong Kong

The process for a variation of members rights Hong Kong law requires careful compliance with both the company's constitution and statutory requirements under Cap. 622. The variation can be effected in one of two ways: by a special resolution of the company followed by the consent of the class affected, or by a court order.

Where the variation is made by special resolution, the company must first pass a special resolution at a general meeting. Notice of the meeting must be given to all members, including those of the class whose rights are being varied. The special resolution must be passed by at least 75% of the votes cast by members entitled to vote.

After the special resolution is passed, the company must obtain the consent of the class of members whose rights are being varied. This consent can be given either by a separate class meeting or by a written consent signed by the holders of at least 75% of the voting rights of that class. The consent must be obtained within 15 days of the special resolution.

NSC16 Form Companies Registry Requirements

The NSC16 form Companies Registry requires specific information to be completed accurately. The form must include:

• The company's name and company registration number
• The date of the special resolution or court order approving the variation
• The date the variation took effect
• A description of the class of members whose rights have been varied
• The details of the variation
• A certified true copy of the special resolution (if the variation was by special resolution)
• A certified true copy of the court order (if the variation was by court order)

The form must be signed by a director or the company secretary of the company. The signature must be witnessed.

Altering Class Member Rights: Procedures for Consent

When altering class member rights, the company must ensure that the consent of the class is obtained in accordance with the company's constitution and Cap. 622. The class consent must be obtained within 15 days after the special resolution is passed. If the company's constitution contains additional requirements, those must also be satisfied.

The class consent can be given by:

• A separate class meeting of the members of that class, at which a resolution is passed by at least 75% of the votes cast
• A written consent signed by the holders of at least 75% of the voting rights of that class

The company must give notice to the members of that class of the class meeting. The notice must include the details of the proposed variation and the date of the class meeting.

Filing Form NSC16 with the Companies Registry

Form NSC16 must be filed with the Companies Registry within 15 days after the variation takes effect. The form can be submitted electronically through the e-Services portal or by post or in person at the Companies Registry office.

When submitting the form, the company must include:

• The completed Form NSC16
• A certified true copy of the special resolution (if applicable)
• A certified true copy of the court order (if applicable)
• The registration fee (currently HK$265 for paper filing or HK$265 for electronic filing through the e-Services portal)

The Companies Registry will issue a certificate of registration upon acceptance of the form. The company should retain this certificate as evidence of compliance.

Special Resolution Requirements for Variation

The special resolution must comply with the requirements under section 564 of the Companies Ordinance (Cap. 622). The resolution must be passed by at least 75% of the votes cast by members entitled to vote. Notice of the meeting must be given to all members at least 14 days before the meeting, unless the company's constitution provides for a longer period.

The notice must include:

• The text of the proposed resolution
• A statement explaining the effect of the variation on the rights of the class
• The date and time of the general meeting

If the variation is by court order, the court order must be obtained under section 567 of Cap. 622. The court order must be filed with Form NSC16 within 15 days after the order is made.

Class of Members and Company Constitution

The company constitution plays a central role in the variation of class rights. The articles of association may contain additional requirements beyond those in Cap. 622, such as:

• A higher threshold for class consent (e.g., 90% instead of 75%)
• Additional notice periods for class meetings
• Restrictions on varying certain rights without unanimous consent

The company must review its constitution before proceeding with the variation. If the constitution is silent on the procedure, the default provisions in Cap. 622 apply.

Company Limited by Guarantee and Class Rights

For a company limited by guarantee, the variation of class members' rights follows similar principles. The company must identify the classes of members in its constitution and follow the statutory procedure. The consent of the class must be obtained in the same manner as for a company limited by shares.

The Form NSC16 must clearly state the class of members whose rights have been varied. For a company limited by guarantee, this may be based on the amount of the guarantee, the duration of membership, or other criteria set out in the constitution.

Court Approval for Variation

In certain circumstances, the variation of class rights requires court approval under section 567 of Cap. 622. This applies where:

• The company's constitution does not provide for variation of class rights
• The variation is opposed by at least 15% of the members of the class
• The court orders the variation after an application by the company

The court order must be filed with Form NSC16. The company must serve a copy of the court order on the Companies Registry within 15 days after the order is made.

Certified True Copy and Supporting Documents

When filing Form NSC16, the company must include a certified true copy of:

• The special resolution (if the variation was by special resolution)
• The court order (if the variation was by court order)
• The written consent of the class (if obtained by written consent)

The certified true copy must be certified by a director or the company secretary of the company. The certification must state that the copy is a true and correct copy of the original document.

Return Date and Late Filing

The return date for filing Form NSC16 is 15 days after the variation takes effect. If the form is filed late, the company may face a higher registration fee. The late filing fee for Form NSC16 is currently HK$870 if filed within 42 days after the return date, increasing to HK$1,740 after 42 days.

Companies should file Form NSC16 promptly to avoid additional costs. The Companies Registry may also impose penalties for non-compliance with the filing requirement.

Additional Considerations

A company that varies the rights of a class of members must also update its register of members if the variation affects the rights attached to shares or membership interests. The change should be recorded in the company's records.

The variation of class rights may also trigger obligations under other parts of the Companies Ordinance, such as the requirement to file Form NAR1 if the company's particulars have changed.