The Financial Services & the Treasury Bureau has launched the second-phase public consultation on the Companies Bill draft provisions dealing with business facilitation and more technical issues such as share capital, and accounting and auditing.

The three-month consultation is part of the Companies Ordinance rewrite exercise to make the law more user-friendly and facilitate the conduct of business, to enhance the city's competitiveness and attractiveness as a major international business and financial centre.

The first-phase public consultation, which concluded on March 16, covered about half of the bill, mainly dealing with corporate governance matters. This second-phase consultation covers the other half - or 11 parts - of the bill.

The key proposed legislative changes in this phase include:

* improving company information disclosure by requiring public companies and larger private companies to furnish a more analytical and forward-looking business review as part of the directors' report;

* strengthening auditors' rights to obtain information to perform their duties;

* streamlining and updating the regime of registration of charges; and,

* allowing more private companies and small guarantee companies to take advantage of simplified accounting and reporting requirements to save their compliance and business costs.

Related issues

Several issues are also highlighted for consultation. They include:

* revisiting the option of abolishing the rules governing private companies giving financial assistance to acquire their own shares;

* proposing to drop the proposal to require preparation of a directors' remuneration report in addition to the annual accounts;

* proposing minor changes to the provisions concerning the Financial Secretary's powers to investigate or enquire into a company's affairs, and new provisions empowering the Registrar of Companies to obtain documents, records and information in certain circumstances; and,

* whether a company should be required to give reasons explaining its refusal to register a transfer of shares.

The bureau will  refine the draft bill in light of comments received with the aim of tabling it to the Legislative Council by the end of the year.

Click here for the consultation document. Comments and submissions should be sent by August 6 by mail to the bureau's Companies Bill Team, 15/F, Queensway Government Offices, 66 Queensway, Hong Kong, email, or fax to 2869 4195.