What Are The Rights And Responsibilities Of Directors Before Registration Of Hongkong Company?

Generally speaking, the responsibilities of directors of Hongkong companies come from many aspects, including articles of association, court precedents and laws and regulations.

If a person fails to fulfil his director's liability, he may be liable in civil or criminal proceedings, or may be disqualified as director.

Principle 1 it is the responsibility to act in good faith in the interests of the company as a whole.

A company director must act in good faith on the premise of the best interests of the company.

It means that directors are responsible for the interests of current and future shareholders.

In carrying out this responsibility, a director must (within practical limits) take into account the need to achieve fair results among the members of the company.

The power exercised by a company director must be "an appropriate purpose".

This means that the purpose of exercising power is not the same as the purpose authorized. The director shall not exercise power for this purpose.

The basic or main purpose of exercising the power of the director must be for the interests of the company.

If the underlying motive is found to be for other reasons, such as giving one or more directors interests or manipulating the company, the consequences of exercising power can be declared invalid.

It is also a breach of duty to change directors to act in good faith.

Principle 3, it is a duty not to delegate power (except by a duly authorized person), and is responsible for making independent judgements.

A company director shall not delegate authority unless the company's articles of association and articles of Association (or articles of association) or resolutions are recognized.

A company director must make an independent judgement of exercising power.

Principle 4 it is the duty to act with due care, skill and diligence.

A company director must act with caution, skill and diligence, acting as a reasonable person in the position of the director, acting on the knowledge, skills and experience that can be reasonably expected.

The court, when deciding whether a director is responsible for fulfilling this responsibility, will also take into account the prudence, skill and effort that should be exercised by a reasonable person with the additional knowledge, skills and experience of the director.

A company director shall not allow personal interests to conflict with the interests of the company.

Principle 6 it is the duty not to engage in pactions of interest, except those that meet the requirements of the law.

If any paction has a key interest relationship with the director of the company, and if one of the pactions is or may be the company, the director shall perform certain responsibilities.

Unless the director has fulfilled these responsibilities, he shall not authorize, promote or permit the company to enter into a paction when he performs the functions of the director.

In addition, unless a director has complied with the law, he will not enter into a paction with the company.

The law requires directors to disclose the nature of their interests in respect of the above pactions.

Under certain circumstances, the articles of association may prescribe procedures for approval of directors or members in respect of the proposed pactions.

Directors must disclose relevant interests as required.

Where applicable, he must be approved by other directors or members.

Principle 7 it is the responsibility not to make use of the rights of directors.

A company director shall not use the position of director to directly or indirectly seek benefits for himself or others, nor shall he directly or indirectly seek to make the interests of the company damaged.

A company director shall not use the company's property or information or the company's business opportunities as a director.

If an application or interest has been disclosed to the company at the general meeting of the company and approved, it is an exception.

Principle 9, it is the responsibility not to accept the personal interests of the third party for the director's position.

A director or former director of a company shall not accept any interests that the third party has given to a director for his or her right to exercise his director's power. However, the interest given by the company itself or the company's general resolution has been agreed, or the interest is an incidental interest derived from the proper execution of the director's functions.

Principle 10 is responsible for complying with the company's articles of association, articles of association and resolutions.

A company director shall act in accordance with the articles of association and shall comply with the resolution in accordance with the articles of association of the company.

Principle 11 responsibility for keeping proper account books

The directors of a company must take all legal steps to ensure that the accounting books are kept properly so as to truly and fairly react to the company's affairs and explain the pactions made by the company.

In order to avoid the violation of the 275th provision of the Companies Ordinance (thirty-second chapter) concerning fraudulent business, the directors do not allow the company to incur further credit without knowing that there is no reasonable hope of avoiding insolvency.

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