Resolving shareholders’ disputes under the new Companies Ordinance

The new Companies Ordinance (Cap. 622), which came into effect on 3 March 2014, is a substantial rewrite of Hong Kong companies law. The stated objectives of the changes are to enhance corporate governance, ensure better regulation, facilitate business law and modernise the law.

Time and again we see disputes arising among the shareholders of a company. Classic examples of disputes include dictatorial management style, denial of access to company records, breach of duties or dilution of shareholdings.

In Hong Kong and Asia, this is frequently due to the prevalence of large family businesses and often the root of the problems may lie in a breakdown in personal relationships. However, if the family business is an incorporated company, remedial action must be sought in accordance with company law…

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