Division 4     Share Redemptions and Buy-backs
Subdivision 1     Preliminary
233.
Application of Division
This Division applies to—
(a) a company limited by shares; and
(b) a company limited by guarantee having a share capital
that was formed as, or became, such a company under
a former Companies Ordinance before 13 February
2004.

Subdivision 2     Redeemable Shares
234.
Issue of redeemable shares
(1) Subject to subsections (2) and (3), a company may issue
redeemable shares.

 (2) A company’s articles may prohibit or restrict the issue of
redeemable shares.
(3) A company must not issue redeemable shares at a time
when there are no issued shares in the company other than
redeemable shares.
235.
Terms, conditions and manner of redemption
(1) The directors of a company may determine the terms,
conditions and manner of redemption of shares if they are
authorized to do so—
(a) by the company’s articles; or
(b) by resolution of the company.
(2) A resolution under subsection (1)(b) may be an ordinary
resolution even if it amends the company’s articles.
(3) If the directors are authorized under subsection (1) to
determine the terms, conditions and manner of redemption
of shares—
(a) they must do so before the shares are allotted; and
(b) any obligation of the company to state in a statement
of capital the rights attached to the shares extends to
the terms, conditions and manner of redemption.
(4) If the directors are not authorized under subsection (1), the
terms, conditions and manner of redemption of shares
must be stated in the company’s articles.
 

Subdivision 3     Share Buy-backs
236.
General power of company to buy back its own shares
(1) Subject to subsections (2) and (3) and Subdivision 6, a
company may buy back its own shares in accordance with—

 (a) for a listed company, Subdivision 4;
(b) for an unlisted company, Subdivision 5.
(2) A company’s articles may prohibit or restrict a buy-back by
the company of its own shares.
(3) A company must not buy back its own shares if, as a result
of the buy-back, there would no longer be any member of
the company holding shares other than redeemable shares.
(4) A buy-back that contravenes subsection (3) is void.
237.
Retention and inspection of share buy-back contracts
(1) This section applies to—
(a) a listed company that enters into a contract for the
buy-back of its own shares that is authorized under
section 240; and
(b) an unlisted company that—
(i) under an authorization under section 244, enters
into a contract for the buy-back of its own shares;
(ii) under an authorization under section 247, agrees
to a variation of a contract for the buy-back of
its own shares;
(iii) under an authorization under section 251, agrees
to release its rights under a contract for the buy-
back of its own shares; or
(iv) under an authorization under section 254, agrees
to a variation of an agreement to release its rights
under a contract for the buy-back of its own
shares.
(2) The company must keep at its registered office or at a place
prescribed by regulations made under section 657—
(a) a copy of the contract or agreement if it is in writing;
and

 (b) if not, a memorandum of its terms.
(3) The copy or memorandum must be kept from the
conclusion of the contract or agreement until the end of
the period of 10 years beginning on the day on which the
buy-back of all the shares under the contract is completed
or the day on which the contract otherwise terminates.
(4) Subject to subsection (5), the company must make the copy
or memorandum available during business hours for
inspection without charge by—
(a) a member of the company; and
(b) any other person, in the case of a listed company.
(5) The company may, by resolution, impose reasonable
restrictions on the making available of the copy or
memorandum for inspection, as long as not less than 2
hours per day are allowed for inspection.
(6) If a company contravenes subsection (2) or (3), or if an
inspection required under subsection (4) is refused, the
company, and every responsible person of the company,
commit an offence, and each is liable to a fine at level 5
and, in the case of a continuing offence, to a further fine of
$1,000 for each day during which the offence continues.
(7) In the case of a refusal of an inspection required under
subsection (4), the Court may by order require the
company to permit an immediate inspection.
(8) In this section—
contract (合約) includes a contingent buy-back contract.

 (b) the person is neither—
(i) a member, officer, shadow director or employee of
the company making the general offer or of an
associated company of that company; nor
(ii) an associated company of the company making
the general offer.
(5) For the purposes of a special resolution referred to in
subsection (3)(b)—
(a) a non-tendering member is to be regarded as voting
not only if the non-tendering member votes on a poll
on the question whether the resolution should be
passed but also if the non-tendering member votes on
the resolution otherwise than on a poll;
(b) any member of the company may demand a poll on
that question; and
(c) a vote or a demand for a poll by a person as proxy for
a member is the same as a vote or a demand by the
member.
(6) In this section—
general offer (公開要約) has the meaning given by section 707;
non-tendering member (不售股成員) has the meaning given by
section 705.
239.
Share buy-back on recognized stock market or approved stock
exchange
(1) A listed company may buy back its own shares on a
recognized stock market or on an approved stock exchange
if the buy-back is authorized in advance by resolution of
the company.
(2) The company must include a memorandum of the terms of
the proposed buy-back with the notice of the proposed
resolution.

 (3) A resolution authorizing a buy-back under this section is
valid for the period expiring on the date of the next annual
general meeting of the company, and that period may be
extended by the company at that annual general meeting
until the date of the following annual general meeting.
(4) In this section—
approved stock exchange (核准證券交易所) means a stock
exchange approved for the purposes of this section by
notice published in the Gazette by—
(a) the Commission; and
(b) the recognized exchange company that operates the
recognized stock market on which the shares
concerned are listed.
240.
Share buy-back otherwise than under section 238 or 239
(1) A listed company may buy back its own shares otherwise
than under section 238 or 239 if the contract for buy-back
of the shares is authorized in advance by special resolution.
(2) A contract may take the form of a contingent buy-back
contract.
(3) The company must include with the notice of the proposed
special resolution—
(a) a copy of the proposed contract or, if it is not in
writing, a memorandum of its terms; and
(b) a statement, signed by the directors of the company,
after having made due and diligent inquiry of the
members of the company holding the shares to which
the proposed contract relates, containing information
that would enable a reasonable person to form a valid
and justifiable opinion as to the merits of the contract.
(4) A special resolution under this section is not effective if—

 (a) any member of the company holding shares to which
the resolution relates exercises the voting rights carried
by any of those shares; and
(b) the resolution would not have been passed if the
member had not done so.
(5) For the purposes of subsection (4)—
(a) a member holding shares to which the resolution
relates is to be regarded as exercising the voting rights
carried by those shares not only if the member votes
in respect of them on a poll on the question whether
the resolution should be passed but also if the member
votes on the resolution otherwise than on a poll;
(b) any member of the company may demand a poll on
that question; and
(c) a vote or a demand for a poll by a person as proxy for
a member is the same as a vote or a demand by the
member.
(6) A special resolution under this section is not effective if a
demand for a poll referred to in subsection (5)(b) is refused.
241.
Exemptions
(1) The Commission may exempt any listed company from any
of the provisions of section 238, 239 or 240, subject to any
conditions it thinks fit.
(2) The Commission may—
(a) suspend or withdraw an exemption granted under
subsection (1) on the ground that the conditions
subject to which the exemption was granted have not
been complied with or on any other ground the
Commission thinks fit; or
(b) vary any condition imposed under subsection (1).

 242.
No assignment of right to buy back own shares
The following rights of a listed company are not capable of
being assigned—
(a) rights under a general offer authorized under section
238;
(b) rights under a buy-back on a recognized stock market
or on an approved stock exchange authorized under
section 239;
(c) rights under a contract authorized under section 240.
243.
Release of right to buy back own shares
(1) An agreement by a listed company to release its rights
under a contract authorized under section 240 or under a
general offer authorized under section 238 is void unless
the terms of the release agreement are authorized in
advance by special resolution.
(2) Section 240(3), (4), (5) and (6) applies to the authorization
for a proposed release agreement as it applies to the
authorization for a proposed contract under section 240.

Subdivision 5     Share Buy-backs: Unlisted Companies
244.
Share buy-back under contract
(1) An unlisted company may buy back its own shares under a
contract that is authorized in advance by special resolution.
(2) A contract may take the form of a contingent buy-back
contract.
(3) The authorization for a contract may be varied, revoked or
from time to time renewed by special resolution.

 (4) A special resolution conferring, varying, revoking or
renewing the authorization for a contract is subject to
sections 245 and 246.
245.
Resolution authorizing contract: disclosure of contract details
(1) This section applies in relation to a special resolution to
confer, vary, revoke or renew the authorization for a
contract under section 244.
(2) A copy of the proposed contract (if it is in writing) or a
memorandum setting out its terms (if it is not) must be
made available to members—
(a) in the case of a written resolution, by being sent to
every member of the company at or before the time
when the proposed resolution is sent to them; or
(b) in the case of a resolution proposed at a meeting, by
being made available for inspection by members of the
company—
(i) at the company’s registered office or at a place
prescribed by regulations made under section 657,
for a period of not less than 15 days ending on
the date of the meeting; and
(ii) at the meeting.
(3) A memorandum referred to in subsection (2) must include
the names of members holding shares to which the
proposed contract relates.
(4) A copy of a proposed contract made available under
subsection (2) must have annexed to it a memorandum
specifying any of those names that do not appear in the
proposed contract.
(5) The special resolution is not effective if the requirements of
this section are not complied with.

 246.
Resolution authorizing contract: exercise of voting rights
(1) This section applies to a special resolution to confer, vary,
revoke or renew the authorization for a contract under
section 244.
(2) If the special resolution is proposed as a written resolution,
a member holding shares to which the resolution relates is
not an eligible member for the purposes of Subdivision 2
of Division 1 of Part 12 (written resolution) in respect of
those shares.
(3) If the special resolution is proposed at a meeting, the
resolution is not effective if—
(a) any member of the company holding shares to which
the resolution relates exercises the voting rights carried
by any of those shares; and
(b) the resolution would not have been passed if the
member had not done so.
(4) For the purposes of subsection (3)—
(a) a member holding shares to which the resolution
relates is to be regarded as exercising the voting rights
carried by those shares not only if the member votes
in respect of them on a poll on the question whether
the resolution should be passed but also if the member
votes on the resolution otherwise than on a poll;
(b) any member of the company may demand a poll on
that question; and
(c) a vote or a demand for a poll by a person as proxy for
a member is the same as a vote or a demand by the
member.
(5) The special resolution is not effective if a demand for a
poll referred to in subsection (4)(b) is refused.

 247.
Variation of authorized contract
(1) An unlisted company may agree to a variation of a
contract authorized under section 244 if the variation
agreement is authorized in advance by special resolution.
(2) The authorization for a variation agreement may be varied,
revoked or from time to time renewed by special resolution.
(3) A special resolution conferring, varying, revoking or
renewing the authorization for a variation agreement is
subject to sections 248 and 249.
248.
Resolution authorizing variation: disclosure of details of variation
(1) This section applies in relation to a special resolution to
confer, vary, revoke or renew the authorization for a
variation agreement under section 247.
(2) A copy of the proposed variation agreement (if it is in
writing) or a memorandum giving details of the proposed
variation agreement (if it is not) must be made available to
members—
(a) in the case of a written resolution, by being sent to
every member of the company at or before the time
when the proposed resolution is sent to them; or
(b) in the case of a resolution proposed at a meeting, by
being made available for inspection by members of the
company—
(i) at the company’s registered office or at a place
prescribed by regulations made under section 657,
for a period of not less than 15 days ending on
the date of the meeting; and
(ii) at the meeting.

 (3) There must also be made available to members in
accordance with subsection (2) a copy of the original
contract or memorandum, together with any variations
previously made.
(4) A memorandum referred to in subsection (2) must include
the names of members holding shares to which the
proposed variation agreement relates.
(5) A copy of a proposed variation agreement made available
under subsection (2) must have annexed to it a
memorandum specifying any of those names that do not
appear in the proposed variation agreement.
(6) The special resolution is not effective if the requirements of
this section are not complied with.
249.
Resolution authorizing variation: exercise of voting rights
(1) This section applies to a special resolution to confer, vary,
revoke or renew the authorization for a variation agreement
under section 247.
(2) If the special resolution is proposed as a written resolution,
a member holding shares to which the resolution relates is
not an eligible member for the purposes of Subdivision 2
of Division 1 of Part 12 (written resolution) in respect of
those shares.
(3) If the special resolution is proposed at a meeting, the
resolution is not effective if—
(a) any member of the company holding shares to which
the resolution relates exercises the voting rights carried
by any of those shares; and
(b) the resolution would not have been passed if the
member had not done so.
(4) For the purposes of subsection (3)—

 (a) a member holding shares to which the resolution
relates is to be regarded as exercising the voting rights
carried by those shares not only if the member votes
in respect of them on a poll on the question whether
the resolution should be passed but also if the member
votes on the resolution otherwise than on a poll;
(b) any member of the company may demand a poll on
that question; and
(c) a vote or a demand for a poll by a person as proxy for
a member is the same as a vote or a demand by the
member.
(5) The special resolution is not effective if a demand for a
poll referred to in subsection (4)(b) is refused.
250.
No assignment of right to buy back own shares
The rights of an unlisted company under a contract authorized
under section 244 (as varied from time to time under section
247) are not capable of being assigned.
251.
Release of right to buy back own shares
(1) An agreement by an unlisted company to release its rights
under a contract authorized under section 244 (as varied
from time to time under section 247) is void unless the
terms of the release agreement are authorized in advance
by special resolution.
(2) The authorization for a release agreement may be varied,
revoked or from time to time renewed by special resolution.
(3) A special resolution conferring, varying, revoking or
renewing the authorization for a release agreement is
subject to sections 252 and 253.

 252.
Resolution authorizing release: disclosure of details of release
(1) This section applies in relation to a special resolution to
confer, vary, revoke or renew the authorization for a release
agreement under section 251.
(2) A copy of the proposed release agreement (if it is in
writing) or a memorandum giving details of the proposed
release agreement (if it is not) must be made available to
members—
(a) in the case of a written resolution, by being sent to
every member of the company at or before the time
when the proposed resolution is sent to them; or
(b) in the case of a resolution proposed at a meeting, by
being made available for inspection by members of the
company—
(i) at the company’s registered office or at a place
prescribed by regulations made under section 657,
for a period of not less than 15 days ending on
the date of the meeting; and
(ii) at the meeting.
(3) There must also be made available to members in
accordance with subsection (2) a copy of the original
contract or memorandum, together with any variations
previously made.
(4) A memorandum referred to in subsection (2) must include
the names of members holding shares to which the
proposed release agreement relates.
(5) A copy of a proposed release agreement made available
under subsection (2) must have annexed to it a
memorandum specifying any of those names that do not
appear in the proposed release agreement.
(6) The special resolution is not effective if the requirements of
this section are not complied with.

 253.
Resolution authorizing release: exercise of voting rights
(1) This section applies to a special resolution to confer, vary,
revoke or renew the authorization for a release agreement
under section 251.
(2) If the special resolution is proposed as a written resolution,
a member holding shares to which the resolution relates is
not an eligible member for the purposes of Subdivision 2
of Division 1 of Part 12 (written resolution) in respect of
those shares.
(3) If the special resolution is proposed at a meeting, the
resolution is not effective if—
(a) any member of the company holding shares to which
the resolution relates exercises the voting rights carried
by any of those shares; and
(b) the resolution would not have been passed if the
member had not done so.
(4) For the purposes of subsection (3)—
(a) a member holding shares to which the resolution
relates is to be regarded as exercising the voting rights
carried by those shares not only if the member votes
in respect of them on a poll on the question whether
the resolution should be passed but also if the member
votes on the resolution otherwise than on a poll;
(b) any member of the company may demand a poll on
that question; and
(c) a vote or a demand for a poll by a person as proxy for
a member is the same as a vote or a demand by the
member.
(5) The special resolution is not effective if a demand for a
poll referred to in subsection (4)(b) is refused.

 254.
Variation of release of right to buy back own shares
(1) An unlisted company may agree to a variation of a release
agreement authorized under section 251 if the variation
agreement is authorized in advance by special resolution.
(2) The authorization for a variation agreement may be varied,
revoked or from time to time renewed by special resolution.
(3) A special resolution conferring, varying, revoking or
renewing the authorization for a variation agreement is
subject to sections 255 and 256.
255.
Resolution authorizing variation of release: disclosure of details
of variation
(1) This section applies in relation to a special resolution to
confer, vary, revoke or renew the authorization for a
variation agreement under section 254.
(2) A copy of the proposed variation agreement (if it is in
writing) or a memorandum giving details of the proposed
variation agreement (if it is not) must be made available to
members—
(a) in the case of a written resolution, by being sent to
every member of the company at or before the time
when the proposed resolution is sent to them; or
(b) in the case of a resolution proposed at a meeting, by
being made available for inspection by members of the
company—
(i) at the company’s registered office or at a place
prescribed by regulations made under section 657,
for a period of not less than 15 days ending on
the date of the meeting; and
(ii) at the meeting.

 (3) There must also be made available to members in
accordance with subsection (2) a copy of the original
release agreement or memorandum, together with any
variations previously made.
(4) A memorandum referred to in subsection (2) must include
the names of members holding shares to which the
proposed variation agreement relates.
(5) A copy of a proposed variation agreement made available
under subsection (2) must have annexed to it a
memorandum specifying any of those names that do not
appear in the proposed variation agreement.
(6) The special resolution is not effective if the requirements of
this section are not complied with.
256.
Resolution authorizing variation of release: exercise of voting
rights
(1) This section applies to a special resolution to confer, vary,
revoke or renew the authorization for a variation agreement
under section 254.
(2) If the special resolution is proposed as a written resolution,
a member holding shares to which the resolution relates is
not an eligible member for the purposes of Subdivision 2
of Division 1 of Part 12 (written resolution) in respect of
those shares.
(3) If the special resolution is proposed at a meeting, the
resolution is not effective if—
(a) any member of the company holding shares to which
the resolution relates exercises the voting rights carried
by any of those shares; and
(b) the resolution would not have been passed if the
member had not done so.
(4) For the purposes of subsection (3)—

 (a) a member holding shares to which the resolution
relates is to be regarded as exercising the voting rights
carried by those shares not only if the member votes
in respect of them on a poll on the question whether
the resolution should be passed but also if the member
votes on the resolution otherwise than on a poll;
(b) any member of the company may demand a poll on
that question; and
(c) a vote or a demand for a poll by a person as proxy for
a member is the same as a vote or a demand by the
member.
(5) The special resolution is not effective if a demand for a
poll referred to in subsection (4)(b) is refused.
 

Subdivision 6     Payment for Share Redemptions and Buy-backs
257.
Payment for redemption or buy-back
(1) If a company redeems or buys back its own shares, the
shares must be paid for on redemption or buy-back.
(2) Subject to subsections (3) and (4), a company may make a
payment in respect of a redemption or buy-back of its own
shares—
(a) out of the company’s distributable profits;
(b) out of the proceeds of a fresh issue of shares made for
the purpose of the redemption or buy-back; or
(c) out of capital in accordance with this Subdivision.
(3) A listed company must not make a payment out of capital
in respect of a buy-back of its own shares on a recognized
stock market or on an approved stock exchange under
section 239.

 (4) Subject to subsection (3), a payment referred to in
subsection (5) may be made by a company only—
(a) out of the company’s distributable profits; or
(b) out of capital in accordance with this Subdivision.
(5) Subsection (4) applies to a payment by a company in
consideration of any of the following—
(a) the company acquiring any right with respect to the
buy-back of its own shares under Subdivision 4 or 5;
(b) the variation of a contract authorized under
Subdivision 5; or
(c) the release, or variation of the release, of any of the
company’s obligations with respect to the buy-back of
any of its own shares under Subdivision 4 or 5.
258.
Special resolution for payment out of capital
(1) Subject to section 257(3), a company may make a payment
out of capital in respect of the redemption or buy-back of
its own shares by special resolution in accordance with this
Subdivision.
(2) Subject to section 263, the payment out of capital and the
redemption or buy-back must be made no earlier than
5 weeks and no later than 7 weeks after the date of the
special resolution.
259.
Solvency statement for payment out of capital
(1) All directors of the company must make a solvency
statement that complies with Division 2 in relation to the
payment out of capital.
(2) The special resolution for payment out of capital must be
passed within 15 days after the date of the solvency
statement.

 (3) If the special resolution is proposed as a written resolution,
a copy of the solvency statement must be sent to every
member of the company at or before the time when the
proposed resolution is sent to them.
(4) If the special resolution is proposed at a meeting, a copy of
the solvency statement must be made available for
inspection by members at the meeting.
(5) The special resolution is not effective if subsection (3) or (4)
(as applicable) is not complied with.
260.
Special resolution: exercise of voting rights
(1) If the special resolution for payment out of capital is
proposed as a written resolution, a member of the company
holding shares to which the resolution relates is not an
eligible member for the purposes of Subdivision 2 of
Division 1 of Part 12 (written resolution) in respect of
those shares.
(2) If the special resolution for payment out of capital is
proposed at a meeting, the resolution is not effective if—
(a) any member of the company holding shares to which
the resolution relates exercises the voting rights carried
by any of those shares; and
(b) the resolution would not have been passed if the
member had not done so.
(3) For the purposes of subsection (2)—
(a) a member holding shares to which the resolution
relates is to be regarded as exercising the voting rights
carried by those shares not only if the member votes
in respect of them on a poll on the question whether
the resolution should be passed but also if the member
votes on the resolution otherwise than on a poll;
(b) any member of the company may demand a poll on
that question; and

 (c) a vote or a demand for a poll by a person as proxy for
a member is the same as a vote or a demand by the
member.
(4) The special resolution is not effective if a demand for a
poll referred to in subsection (3)(b) is refused.
(5) This section does not apply to a buy-back by a listed
company under a general offer in accordance with section
238.
261.
Public notice of payment out of capital
(1) If a special resolution for payment out of capital is passed,
the company must, on or before the date specified in
subsection (2), publish a notice in the Gazette—
(a) stating that the company has approved a payment out
of capital;
(b) specifying the amount of the payment out of capital
and the date of the special resolution;
(c) stating where the special resolution and solvency
statement are available for inspection; and
(d) stating that a member of the company who did not
consent to or vote in favour of the special resolution
or a creditor of the company may, within 5 weeks after
the date of the special resolution, apply to the Court
under section 263 for cancellation of the special
resolution.
(2) The date is—
(a) a date that falls on the last working day of the week
after the week in which the special resolution is passed;
or

 (b) if the period between the date in paragraph (a) and
the date on which the special resolution is passed is
less than 4 business days (both dates exclusive), a date
that falls on the last working day of the week next
following.
Examples—
1.
The special resolution is passed on 2 February of a year (Thursday).
Apart from Saturdays and Sundays, all other dates in February of
that year are business days. The date that falls on the last working
day of the week after the week in which the special resolution is
passed is 10 February (Friday) of that year. There are 5 business
days between 2 February and 10 February. Therefore, the relevant
notice must be published in the Gazette on or before 10 February
(Friday) of that year.
2.
The special resolution is passed on 30 March of a year (Friday).
Both 4 April (Wednesday) and 6 April (Friday) of that year are
general holidays. 2 April (Monday), 3 April (Tuesday), 5 April
(Thursday) and 13 April (Friday) of that year are business days.
The date that falls on the last working day of the week after the
week in which the special resolution is passed is 5 April (Thursday).
There are only 2 business days between 30 March and 5 April.
Therefore, the relevant notice must be published in the Gazette on
or before the last working day of the week next following, which is
13 April (Friday) of that year.
(3) Before the end of the week after the week in which the
special resolution for payment out of capital is passed, the
company must also—
(a) publish a notice to the same effect as the notice under
subsection (1) in at least one specified Chinese
language newspaper and at least one specified English
language newspaper; or
(b) give written notice to that effect to each of its
creditors.
(4) If the company contravenes subsection (1) or (3), the
company, and every responsible person of the company,
commit an offence, and each is liable to a fine at level 3.

 (5) The company must deliver to the Registrar for registration
a copy of the solvency statement no later than the day on
which the company—
(a) publishes the notice under subsection (1); or
(b) if earlier, first publishes the notice or gives notice to
creditors under subsection (3).
(6) If the company contravenes subsection (5), the company,
and every responsible person of the company, commit an
offence, and each is liable to a fine at level 5 and, in the
case of a continuing offence, to a further fine of $1,000 for
each day during which the offence continues.
(7) For the purposes of subsection (2)—
business day (辦公日) means a day that is not—
(a) a general holiday;
(b) a Saturday; or
(c) a black rainstorm warning day or gale warning day as
defined by section 71(2) of the Interpretation and
General Clauses Ordinance (Cap. 1);
working day (工作日) means a day that is not—
(a) a general holiday; or
(b) a Saturday.
262.
Inspection of special resolution and solvency statement
(1) The company must ensure that the special resolution for
payment out of capital and the solvency statement made in
relation to it are kept at its registered office or at a place
prescribed by regulations made under section 657 for the
period—
(a) beginning on the day on which the company—
(i) publishes the notice under section 261(1); or

 (ii) if earlier, first publishes the notice or gives notice
to creditors under section 261(3); and
(b) ending 5 weeks after the date of the special resolution.
(2) The company must permit a member or creditor of the
company to inspect the special resolution and solvency
statement without charge during business hours in that
period.
(3) If the company contravenes subsection (1) or (2), the
company, and every responsible person of the company,
commit an offence, and each is liable to a fine at level 5
and, in the case of a continuing offence, to a further fine of
$1,000 for each day during which the offence continues.
(4) If the company contravenes subsection (2), the Court may
by order require the company to permit an immediate
inspection.
263.
Application to Court by members or creditors
(1) Subject to subsection (2), a member or creditor of the
company may apply to the Court, within 5 weeks after the
date of the special resolution for payment out of capital,
for cancellation of the resolution.
(2) A member who consented to or voted in favour of the
special resolution is not entitled to apply.
(3) An application may be made on behalf of the persons
entitled to apply by any one or more of them appointed in
writing by all of them.
(4) If an application is made under this section—
(a) the applicant must, as soon as possible, serve the
application on the company; and
(b) the company must give the Registrar notice in the
specified form of the application within 7 days after the
day on which the application is served on the company.

 (5) If the company contravenes subsection (4)(b), the company,
and every responsible person of the company, commit an
offence, and each is liable to a fine at level 3 and, in the
case of a continuing offence, to a further fine of $300 for
each day during which the offence continues.
264.
Power of Court to adjourn proceedings
(1) The Court may adjourn proceedings on an application
under section 263 so that an arrangement may be made to
its satisfaction for the protection of the interests of
dissentient members or dissentient creditors.
(2) The Court may give any directions and make any orders it
thinks expedient for facilitating or carrying into effect any
such arrangement.
265.
Power of Court to confirm or cancel special resolution
(1) On an application under section 263, the Court must make
an order confirming or cancelling the special resolution for
payment out of capital, and may do so on any terms and
conditions it thinks fit.
(2) If the Court confirms the special resolution, it may by
order alter or extend any date or period of time specified—
(a) in the special resolution; or
(b) in any provision of this Division applying to the
special resolution, the payment out of capital or the
redemption or buy-back.
(3) If the Court thinks fit, the order may—
(a) provide for the company to buy back the shares of any
of its members and for the reduction accordingly of
the company’s share capital;
(b) provide for the protection of the interests of members
or creditors of the company;

 (c) make any alteration to the company’s articles that may
be required as a consequence;
(d) require the company not to make any, or any specified,
alteration to its articles.
(4) If the order of the Court requires the company not to
make any, or any specified, alteration to its articles, the
company does not have power to make any such alteration
without leave of the Court.
(5) The powers of the Court under this section do not limit its
powers under section 264.
266.
Company to deliver copy of order of Court to Registrar
(1) Within 15 days after the making of an order by the Court
under section 265, or within any longer period ordered by
the Court, the company must deliver an office copy of the
order to the Registrar for registration.
(2) If the company contravenes subsection (1), the company,
and every responsible person of the company, commit an
offence, and each is liable to a fine at level 3 and, in the
case of a continuing offence, to a further fine of $300 for
each day during which the offence continues.

Subdivision 7     General Provisions
267.
General prohibition on acquisition of own shares
(1) Except as provided by this Ordinance, a company must not
acquire its own shares, whether by redemption, buy-back,
subscription or otherwise.
(2) If a company contravenes subsection (1), an offence is
committed by—
(a) the company;

 (b) every responsible person of the company; and
(c) every non-tendering member of the company (as
defined by section 705) who knowingly permits the
contravention.
(3) A person who commits an offence under subsection (2) is
liable—
(a) on conviction on indictment to a fine of $1,250,000
and to imprisonment for 5 years; or
(b) on summary conviction to a fine of $150,000 and to
imprisonment for 12 months.
(4) Subject to section 236(4) and Division 2 of Part 14 (remedies
for unfair prejudice to members’ interests), a redemption or
buy-back of shares by a company under this Division is
not void only because of a failure to comply with this
Division.
268.
No redemption or buy-back of unpaid or partly-paid shares
A company must not redeem or buy back its own shares unless
they are fully paid.
269.
Effect of redemption or buy-back
(1) Shares redeemed or bought back under this Division are to
be regarded as cancelled on redemption or buy-back.
(2) On redemption or buy-back of its own shares, a company
must—
(a) reduce the amount of its share capital if the shares
were redeemed or bought back out of capital;
(b) reduce the amount of its profits if the shares were
redeemed or bought back out of profits; or
(c) reduce the amount of its share capital and profits
proportionately if the shares were redeemed or bought
back out of both capital and profits,

 by the total amount of the price paid by the company for
the shares.
270.
Return of share redemption or buy-back
(1) A company that redeems or buys back any shares under
this Division must, within 15 days after the date on which
the shares are delivered to the company, deliver a return to
the Registrar for registration.
(2) The return—
(a) must be in the specified form;
(b) must state, for the shares of each class redeemed or
bought back—
(i) the number of shares; and
(ii) the date on which they were delivered to the
company;
(c) must include a statement of capital, as at the time
immediately after the redemption or buy-back, that
complies with section 201;
(d) in the case of a listed company, must also state, for the
shares of each class redeemed or bought back—
(i) the maximum and minimum prices paid in respect
of the shares; and
(ii) the aggregate amount paid by the company for
the shares; and
(e) in the case of a redemption or buy-back financed by a
payment out of capital, must also state particulars of
the payment including the date and amount of the
payment.

 (3) Details of shares delivered to the company on different
dates and under different contracts may be included in a
single return. If this is done, the amount required to be
stated under subsection (2)(d)(ii) is the aggregate amount
paid by the company for all the shares to which the return
relates.
(4) If the company contravenes subsection (1), the company,
and every responsible person of the company, commit an
offence, and each is liable to a fine at level 6 and, in the
case of a continuing offence, to a further fine of $2,000 for
each day during which the offence continues.
271.
Effect of company’s failure to redeem or buy back
(1) This section applies if, under this Division, a company—
(a) issues redeemable shares; or
(b) agrees to buy back any of its own shares.
(2) The company is not liable in damages for any failure on its
part to redeem or buy back any of the shares.
(3) Subsection (2) is without prejudice to any right of the
holder of the shares other than the right to sue the
company for damages for the failure.
(4) A court must not grant an order for specific performance
of the terms of the redemption or buy-back if the company
shows that it is unable to make a payment in respect of the
redemption or buy-back out of distributable profits.
272.
Effect on winding up of company’s failure to redeem or buy back
(1) This section applies if—
(a) a company—
(i) issues redeemable shares under this Division; or
(ii) agrees to buy back any of its own shares under
this Division;

 (b) the company is wound up; and
(c) at the commencement of the winding up any of those
shares have not been redeemed or bought back.
(2) The terms of the redemption or buy-back may be enforced
against the company.
(3) Subsection (2) does not apply if—
(a) the terms of the redemption or buy-back provided for
the redemption or buy-back to take place at a date
later than that of the commencement of the winding
up; or
(b) during the period—
(i) beginning on the day on which the redemption or
buy-back was to have taken place; and
(ii) ending on the commencement of the winding up,
the company could not at any time have lawfully made
a payment in respect of the redemption or buy-back
out of distributable profits.
(4) Shares are to be regarded as cancelled when they are
redeemed or bought back under subsection (2).
(5) The following must be paid in priority to any amount that
the company is liable under subsection (2) to pay in respect
of any shares—
(a) all other debts and liabilities of the company (other
than any due to members in their capacity as such);
and
(b) if other shares carry rights (whether as to capital or
income) that are preferred to the rights as to capital
attaching to those shares, any amount due in
satisfaction of those preferred rights.

 (6) Subject to subsection (5), any amount payable under
subsection (2) must be paid in priority to any amounts due
to members in satisfaction of their rights (whether as to
capital or income) as members.
(7) If, under section 264A of the Companies (Winding Up and
Miscellaneous Provisions) Ordinance (Cap. 32), a creditor
of a company is entitled to payment of any interest only
after payment of all other debts of the company, the
company’s debts and liabilities for the purposes of
subsection (5) include the liability to pay that interest.
273.
Power to modify by regulation
(1) The Chief Executive in Council may make regulations
modifying any of the provisions of this Division with
respect to—
(a) the authorization required for a company to buy back
its own shares;
(b) the authorization required for the release by a
company of its rights under a contract for the buy-
back of its own shares, including a contingent buy-
back contract; and
(c) the information to be included in a return by a
company to the Registrar in relation to a share
redemption or buy-back.
(2) Regulations made under this section are subject to the
approval of the Legislative Council.

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