The Financial Services & the Treasury Bureau launched the first-phase public consultation on the draft provisions of the Companies Bill today.

The three-month consultation is part of the Companies Ordinance rewrite exercise. As the draft bill is lengthy, the consultation will be conducted in two phases. The first mainly deals with corporate governance matters. The second will start in March.

The draft bill has incorporated views gathered in three rounds of consultation in 2007 and 2008, and the recommendations of the Standing Committee on Company Law Reform and advisory groups.

Besides seeking views on the draft provisions the consultation paper has highlighted several issues for review, which include:

* whether the "headcount test" for approving a scheme of compromise or arrangement should be retained or abolished;

* whether directors' residential addresses and identification numbers of directors and company secretaries should continue to be disclosed on the public register;

* whether private companies associated with a listed or public company should be subject to more stringent regulations similar to public companies for the purposes of the provisions on fair dealings by directors; and,

* whether the common law derivative action should be abolished.

Secretary for Financial Services & the Treasury Prof KC Chan said the bill will enhance corporate governance, ensure effective and better regulation, facilitate the conduction of business and modernise the company law.

"When the Companies Ordinance rewrite exercise is completed it will modernise the legal framework for companies in Hong Kong and enhance our competitiveness and attractiveness as a major international business and financial centre," he said.

The draft bill will be further refined in light of the comments received. The bureau plans to table it at the Legislative Council by the end of next year.

Click here for the consultation document. Views can be mailed to the bureau's Companies Bill Team, 15/F Queensway Government Offices, 66 Queensway, Hong Kong, or by sending a fax to 2869 4195 or an email by March 16.