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Legal Updates
Legal update: SFC review of online investment services
In this snapshot legal update, we report that on 31 August 2022, the Securities and Futures Commission issued a circular to licensed corporations in relation to the SFC’s review of online brokerage, distribution and advisory services (the “Circular”). The SFC conducted a review of the…Read More
Key Terms of Shareholder Agreements for Investment
1. Overview A shareholder agreement is an agreement between the shareholders of a company. Shareholder agreements establish additional rights and obligations between the shareholders themselves, and supplement the rights under Articles of Association. As Articles of Association are public, often the shareholders wish to set…Read More
Legal update: Consultation on proposed acceptance of commitments from seven car distributors
In this snapshot legal update, we report that on 1 August 2022, the Competition Commission commenced a consultation on its proposal to accept legally binding commitments (“Proposed Commitments”) from seven car distributors (covering 17 car brands) (“Distributors”) relating to their restrictive warranty terms and conditions…Read More
When a director’s days are numbered… removal of directors under the Companies Ordinance of Hong Kong
Members of a Hong Kong private company may remove a director without cause subject to the requirements set out in the Companies Ordinance (“CO”). The general requirements are set out in s. 462 and s. 463 of the CO. They are: A director may…Read More
Equity Incentive Plans
1. What is an equity incentive plan? An equity incentive plan is a scheme adopted and approved by a company that sets out rules that apply to a contract between a company and an individual to provide the individual an interest in or linked to…Read More
Subscription Agreements for Investment
Overview A subscription agreement sets out the terms of an equity investment into the company. It will set out the commercial terms of the investment such as the subscription price for shares, and the class and number of shares to be purchased. It will bind…Read More
Legal update: Law Reform Commission public consultation on new cyber-crimes
In this snapshot legal update, we report that on 20 July 2022, the cybercrime sub-committee of the Law Reform Commission published a consultation paper with its recommendations to introduce five new cyber crimes into law in Hong Kong. The consultation paper followed a comparative and…Read More
Agreeing to be unfair: Can shareholders agree to oust the right to petition to wind up a company?
Establishing a new company can be nerve-racking. A well-drafted shareholders’ agreement ensures that everyone’s respective rights and obligations are clear, helping to minimise potential future disputes. But what are the limits of these agreements; can a shareholder agree that it will not present an “unfair…Read More
Approaching investors with confidence
Before approaching an investor, remember the five P’s: Proper Preparation Prevents Poor Performance. We recommend conducting background due diligence on the potential investor before meeting to see if the investor is suitable for your business. Here are a few topics to explore: 1. The investment…Read More
Data Breach Case Study: Data loss risk in our physical environment
“Human factors always play a significant role in data breaches.” These simple but wise words resonated in our review of a recent investigation report published by the Privacy Commissioner in Hong Kong on 13 June 2022 regarding the loss of physical files containing sensitive personal…Read More
Legal update: Dismissal of alleged sexual harasser held unlawful under Sex Discrimination Ordinance
Introduction Many employers may be aware of the risk of claims under the Sex Discrimination Ordinance (“SDO”) by employees who are subject to sexual harassment during their employment. In contrast, the legal risk that may arise due to any action taken by an employer against…Read More
Due Diligence Tips
Why should you prepare for Due Diligence? It is important to have all the materials concerning due diligence prepared and organised prior to approaching an investor. This will allow you to keep the focus on the actual funding process and transaction documents, rather than responding defensively…Read More
