Companies need to adapt today’s market dynamics and continue to compete and grow no matter of the business environment and competitions.
May it be managing the daily operations, reviewing business agreement, exploring possibilities of a new business opportunity, company expansion, or company restructuring, the managements need to face the challenge every day and make the right decisions to be beneficial to the company. It is important to have the management align around well-defined goals and a clear strategy.
Our professional team brings together a full range of functional and industry skills to help you in different environments. We always try to understand our clients’ needs on priority to provide the relevant and best professional advice based on independent and challenging insights, supported by facts and industry benchmarks. We provide our clients with experience with regard to corporate structuring, incorporation, capital raising, share allotment and transfer, IPO, M&A, deregistration, and liquidation in HK.
Prior to forming a company, shareholders need to consider optimal corporate structure, constitute directors and management, organize functions to achieve the goals of a company. Corporate structure is a system that outlines how certain activities are directed for the best performance. These activities can include rules, roles, and responsibilities. The organizational structure also determines how information flows between levels within the company.
A company can be incorporated by applying a business registration certificate to do business in Hong Kong taking into consideration the following key elements:
Hong Kong has been recognised as the world's leading capital raising centre. As an internationally recognized financial centre with expertise and a well-established legal framework, Hong Kong has provided many international companies with fund raising opportunities and ranked the 3rd and 1st in terms of funds raised through IPOs in 2017 and 2018.
Hong Kong is the key platform for Mainland China’s trading with the rest of the world. It is widely recognized as a gateway for companies to access the China market and the springboard for Chinese enterprises to gain exposure to international markets.
Strategies for raising capital can range from crowdfunding, venture capital, banks, other financial institutions, and angel investors. Companies in Hong Kong may raise capital by issuing shares, right issue. private placing, public placing, ‘offer’ by the company to its shareholders, and/or issuing debentures including debenture stock, bonds and other securities of companies which evidence indebtedness or a loan from external creditors.
An allotment of shares is when a company issues new shares in exchange for cash or otherwise.
Shares may be allotted for cash or for a consideration otherwise than in cash. Some reasons include:
A share transfer is the process of transferring existing shares from one person to existing shareholders or third parties either by sale or gift.
An initial public offering (IPO) refers to the process of offering shares of a private corporation to the public in a new stock issuance. An IPO allows a company to raise capital from public investors. The transition from a private to a public company can be an important time for private investors to fully realize gains from their investment as it typically includes a share premium for current private investors. Meanwhile, it also allows public investors to participate in the offering.
A merger requires two companies to consolidate into a new entity with a new ownership and management structure (ostensibly with members of each firm). The more common distinction to differentiating a deal is whether the purchase is friendly (merger) or hostile (acquisition). Mergers require no cash to complete but dilute each company's individual power.
In an acquisition, a new company does not emerge. Instead, the smaller company is often consumed and ceases to exist with its assets becoming part of the larger company. Acquisitions, sometimes called takeovers, generally carry a more negative connotation than mergers. As a result, acquiring companies may refer to an acquisition as a merger even though it's clearly a takeover. An acquisition takes place when one company takes over all of the operational management decisions of another company. Acquisitions require large amounts of cash, but the buyer's power is absolute.
Deregistration
A Private company can apply to deregister by satisfying the following conditions:
In case a company has outstanding liabilities, it can still apply to be deregistered if its debts are settled or waived by creditors.
Winding Up
Winding up is the process of dissolving a company. While winding up, a company ceases to do business as usual. Its sole purpose is to sell off stock, pay off creditors, and distribute any remaining assets to partners or shareholders.
Winding up a business is a legal process regulated by corporate laws as well as a company's articles of association or partnership agreement. Winding up can be compulsory or voluntary and can apply to publicly and privately held companies.
Compulsory Winding-Up
A company can be legally forced to wind up by a court order. In such cases, the company is ordered to appoint a liquidator to manage the sale of assets and distribution of the proceeds to creditors.
The court order is often triggered by a suit brought by the company's creditors. They are often the first to realize that a company is insolvent because their bills have remained unpaid. In other cases, the winding-up is the final conclusion of a bankruptcy proceeding, which can involve creditors trying to recoup money owed by the company. In any case, a company may not have sufficient assets to satisfy all of its debtors entirely, and the creditors will face an economic loss.
Voluntary Winding-Up
A company's shareholders or partners may trigger a voluntary winding-up, usually by the passage of a resolution. If the company is insolvent, the shareholders may trigger a winding-up to avoid bankruptcy and, in some cases, personal liability for the company's debts. Even if it is solvent, the shareholders may feel their objectives have been met, and it is time to cease operations and distribute company assets.
In Hong Kong, the Trade Marks Registry, the Patents Registry, the Designs Registry and the Copyright Licensing Bodies Registry under the Intellectual Property Department are responsible for registration of trademarks, patents, designs and copyright licensing bodies, respectively.
Trademark
A trademark is a legal right granted by a government to use the trademark exclusively in connection with the goods or services set forth in the registration.
A trademark can be letters, logos, sounds, smells, colors, shapes, packaging or a combination of them. A trademark is used to indicate a trader who makes the goods or offers the services and to distinguish the goods or service of a trader from other traders.
Application for Registration of Trademark
To apply for a trade mark, the applicant need to:
After submitting the application to Intellectual Property Department, the department will perform a Deficiencies Checking to ensure no information required by the department is missing.
The department will then conduct a search of trade marks records for any same or similar trade mark has been registered or been applied for.
The department will then issue an opinion in writing to either lay out the grounds for objection or to confirm the mark is acceptable for registration. Any objection raised need to be addressed within 6 months to meet the requirements.
If the trade mark has been accepted for registration, it will be published in the Hong Kong Intellectual Property Journal. Anyone can view the trade mark in the journal and lodge opposition to it within 3 months.
The whole application process will take at least 6 months provided there is no deficiencies in the application and on objection to the trade mark.
Patent
A patent is a legal right granted by a government for a limited period of time to keep others from making, using, offering for sale, selling or importing the patented invention. In general, a patent right has to be obtained for each and every country/region in which patent protection is desired. Applying for a patent outside Hong Kong or in other regions of China does not automatically give protection in Hong Kong.
Patents may be granted to anyone who invents or discovers any new and useful process, machine, article of manufacture, or compositions of matters, or any new useful improvement thereof. A patent, like any other property right, may also be assigned to others. In the United States, a Standard Patent is enforceable for 20 years from the date on which the application for the patent was filed while Short-term Patent is enforceable for 8 years from the date on which the application for the patent was filed.
A patent in Hong Kong is based on the registration of a patent granted by
Application of a Standard Patent require a 2 stages filing:
The grant of a short-term patent in the Hong Kong SAR is based on a search report from an international searching authority or one of three designated patent offices.
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