Business Law Assignment
Assignment Brief 1
1. Explanation of the legal system
The rule of law is the fundamental principle that govern the procedure through which the power can be exercised in Hong Kong. So, basically rule of law is that aspect of law, which is explicitly determined by the legislation and also the judicial opinions that is the precedents. The concept of rule of law is that no one is supreme than law itself, and each and every one is subject to the rule of law. This concept is the basic principle of legality, and the legal system in Hongkong is comprised of rule of law and the sources of law. The legal system of Hong Kong is based on the very principle that each and every one is subject to law and regardless of the sex, race, tribe etc. all are equal before law, which in other words mean that all people will get equal treatment in law, and nobody will be penalized or without the due process of law. So, legal sys-tem of Hong Kong is the rule of law and the sources from which the law itself is derived.
2. The sources of law
The sources of law of Hong Kong is the Basic Law of the HKSAR, i.e. Hong Kong Special Administrative Region, which was enacted by the National People's Congress in accordance with the Constitution of the People's Republic of China and is Article 8, Article 18 and the Annexure III. 2nd source is the Customary law followed by the 3rd source being, Legislation and Subsidiary legislation, along with the 4th source of Common law and rules of equity, the 5th source is the National Law or the local legislations and finally the International law, along with the various treaties and conventions.
3. Role of government in law-making
The Government under Article 62(5) of the (Law, n.d.), the bills so introduced by the Govern-ment is termed as the Government Bill. Before the introduction of the Bill, the Government first consult the parties who will get affected by the bill and the relevant Panel of the Legislative Council, then the Department of Justice upon request will put the proposal into the form of a bill, which will then be submitted to the Executive Council. When the Executive Council approves it, a notice of the Government's intention to present the bill will be sent to the Clerk to the Legisla-tive Council. The bill will then be published in the Gazette and introduced into the Legislative Council. The law-making process starts with the publication of the Bill in the Gazette, followed by the introduction of it in the Legislative Councils, and after the introduction, a first reading is followed by the second reading and at this point of time the debate in the second reading gets adjourned. The bill then moves towards the Bills Committee and the House Committee and vice versa, which is where the debate in the second reading get resumed, and in so doing the bill reaches the Committee stage, where a third reading takes place, and from there the bill gets passed on to the Chief Executive for the signature, and upon final publication the Bill becomes the law.
4. Legislation that a new business needs to be aware of
A new business at the onset of it must be aware of the certain legislations, and they include the Company Law and the Contract Law (Ordinance., n.d.), along with the Environmental legisla-tion like Product Eco-responsibility Ordinance (Cap. 603) (Department, n.d.), which deals with the environment policies, dangers from the pollutants and the remedies for it, followed by the Consumer legislation, which is to protect the consumers of the business from any malpractices or frauds. The Health and safety legislation deals with the health and safety of the employees with-in the business along with the general public. If, the business involves collection of personal in-formation, then the Legislation on data protection and confidentiality must be adhered to. In to-day’s current situation with innumerable application, mobile phones, tabs, the crime is at its height, so the Rules and regulations relating to cybersecurity is important. Furthermore, Copy-right legislation and the Legislation affecting different industries: Banking, Insurance, Compa-nies etc. must be taken into consideration, depending on the type of business one is doing.
5. Potential implications of three areas of law on a business
When there is the onset of a new business, many things must be taken into consideration, copy-right law, is an important aspect, since infringement of copyright or copyright violation can ren-der the business in to grave consequences. The contract law on the other hand will affect as well in regulating the contracts, breaches of it and the consequences therefrom. Again, for a business to run, there have to be certain number of employees, so Employment Legislation is important for the issues of the retrenchment, reinstatement, or disciplinary matters, etc.
Assignment Brief 2
The formation of the companies is governed by the Companies Ordinance of Hong Kong (Ordinance, 2014), so the basic essentials and the procedures in setting up a private limited com-pany are as follows:
An approved company name is essential before the incorporation of a private limited company.
At least one director is required and there is no cap on the maximum number of directors, but the directors must be of the age of 18, prior to be in the role as director.
A minimum of one shareholder is a must with 50 as the maximum limit.
The appointment of company secretary is a mandate and must be the resident of Hong Kong.
For the share capital, no minimum requirement is there but, at least one shareholder with one or-dinary share issued on the formation of the company.
A local Hong Kong address must be used as the registered address of the company.
A mandatory requirement to file the details of the company officers must be adhered to and the details must be filed with the Hong Kong Registrar of Companies.
A 16.5% corporate tax is a fixed cap for the purpose of taxation.
It is mandatory to maintain the accounts with the Certified Public Accountants in Hong Kong, and the filing of the audited accounts with the Inland Revenue Department, is to be done annu-ally Filing of the annual returns along with the payment of annual registration fee is mandatory and needs to be done with the Companies Registry.
Fanny under Part IVA of the Employment Ordinance (EO) (57, 1968), can submit a claim to the Labour Tribunal, if she can prove beyond reasonable doubt that, she was in the employment for at least two years' and that must be under a continuous contract and is subsequently dismissed without a valid reason. The valid reason is identified by Employment Ordinance (EO) and Fanny must accord only to those as the valid reasons. So, employee's conduct along with the capability or qualifications or redundancy or that if the employment of the employee is allowed to be con-tinued it would be utterly unlawful. The scope of Fanny is limited and she can seek reinstate-ment, but that is subject to approval of the Edward. But, if Fanny can establish that, Edward is in the breach of the implied terms of the contract then she can seek the common law remedy through damages as was held in (Tadjudin Sunny v Bank of America, National Association, 2016) and also in (Williams v Jefferies Hong Kong Ltd, 2013). The facts of the case do not de-pict that Fanny is a employee belonging to the Protected categories, since during the time of her dismissal, she was neither pregnant and was not on maternity leave or on sick leave, and nor she was reportedly injured during the course of her employment, so she do not get any privilege out of that category.
The winding- up of companies refer to dissolution of the companies. There are few ways, a com-pany can wind up. A company can wind up through Members' voluntary liquidation, Creditors' voluntary liquidation, Receivership, Corporate restructuring, and the Court-sanctioned proceed-ings are, Compulsory liquidation, Scheme of arrangement and Provisional supervision through proposed legislation and also by the voluntary winding up, where the shareholders voluntarily winds up the company and creditors also winds up, but there is second method of winding up, which is compulsory winding up, where the High Court of the Hong Kong Special Administra-tive Region, orders to wind up companies. The governing legislation for the winding up of the companies are the (32), 1933) and Companies (Winding-up) Rules (Cap. 32H) (COMPANIES (WINDING-UP) RULES- (Cap. 32, 1937). In the present facts of the case Grace is the only di-rector, and is also the one and only shareholder, and she has decided to dissolve or discontinue the company, so she can opt for voluntary winding up of the company by a shareholder, which she is herself.
So, being the one-man army, Grace can opt for Members' voluntary liquidation without court in-volvement and she must convey her intention of winding up in an extraordinary general meeting of shareholders through a special resolution with at least 75% of the votes cast within five weeks before commencement of the liquidation she must file a certificate of solvency with the Compa-nies Registry in Hong Kong.
Financial Dispute Resolution Centre (Financial Dispute Resolution Centre, n.d.), is the centre for the alternative dispute resolution between the financial institutions and that of their customers. So, to be an eligible claimant Ms. Law have to establish that she had purchased the financial product from bank X. She can apply before the Financial Dispute Resolution Centre (Financial Dispute Resolution Centre, n.d.), after she have received the refusal to cancel the investment of the financial product she did purchase from the financial institution, that is bank X. But, firstly, being an EC, that is eligible claimant, Ms. Law must write to the bank X, and upon reply can ap-ply to Financial Dispute Resolution Centre, and if there is no reply with a period of 60 days from the bank then only she can apply to Financial Dispute Resolution Centre, with the necessary doc-uments in support of her claim. A mediation is a proposed alternative dispute resolution method, where she can state her case or the dispute in the presence of the bank and also in the presence of a neutral mediator. The mediator will try and facilitate the parties to negotiate so that the dispute can be resolved, but cannot impose any award on them. If the process of mediation does not ad-dress the grievance and do not resolve the dispute, the Ms. Law can bring the eligible dispute which is nothing but a monetary dispute that involves the financial institutions and the customers a sum of HK$500,000 or less, to the arbitration, where the arbitrator will resolve the dispute and will pass a binding arbitral award (Financial Dispute Resolution Centre, n.d.).
The building contract containing the arbitration clause is only to resolve the dispute without liti-gation. So, both Davis Contractor Ltd and Johnson Developer Ltd, must try to resolve their dis-pute through arbitration in the presence of a neutral arbitrator, where the order so passed by the arbitrator will be considered binding, no matter what is place of origin of the arbitral award, which in other words mean that, even if the award is foreign or mainland award it is enforceable and is also executable in Hong Kong was held in (Re Petro China International (Hong Kong) Corp Ltd, 2011) and also in (Grand Pacific Holdings Ltd v Pacific China Holdings Ltd (in lig) (No. 1), 2012).
The formation of the companies is governed by the Companies Ordinance of Hong Kong, and the rules so enshrined under is must be adhered to. Under Part IVA of the Employment Ordi-nance (EO), a claim can only be filed before the Labour Court, subject to satisfaction that the employee is under a continuous contract and is subsequently dismissed without a valid reason, and the valid reason must be only those reasons which are identified by Employment Ordinance (EO). Again, for the company to wind up, it can be done through Members' voluntary liquida-tion, Creditors' voluntary liquidation, Receivership, Corporate restructuring, and the Court-sanctioned proceedings are, Compulsory liquidation, Scheme of arrangement and Provisional su-pervision through proposed legislation and also by the voluntary winding up, where the share-holders voluntarily winds up the company and creditors also winds up, but there is second meth-od of winding up, which is compulsory winding up, where the High Court of the Hong Kong Special Administrative Region, orders to wind up companies. A mediation is a proposed alterna-tive dispute resolution method, where she can state her case or the dispute in the presence of the bank and also in the presence of a neutral mediator. The mediator will try and facilitate the par-ties to negotiate so that the dispute can be resolved, but cannot impose any award on them. If the process of mediation does not address the grievance and do not resolve the dispute, the eligible claimant can bring the eligible dispute which is nothing but a monetary dispute that involves the financial institutions and the customers a sum of HK$500,000 or less, to the arbitration, where the arbitrator will resolve the dispute and will pass a binding arbitral award (Financial Dispute Resolution Centre, n.d.). For the alternative dispute resolution, the contracts containing the arbitration clause must be adhered to and the parties in dispute must try to resolve their dispute through arbitration in the presence of a neutral arbitrator, where the order so passed by the arbi-trator will be considered binding.
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32), C. (. U. a. M. P. O. (., 1933. Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32). [Online]
Available at: https://www.elegislation.gov.hk/hk/cap32
57, E. O. (. C., 1968. Employment Ordinance (EO) Cap 57. [Online]
Available at: https://www.elegislation.gov.hk/hk/cap57
COMPANIES (WINDING-UP) RULES- (Cap. 32, s. 2., 1937. COMPANIES (WINDING-UP) RULES- (Cap. 32, section 296). [Online]
Available at: https://www.elegislation.gov.hk/hk/cap32H
Department, E. P., n.d. Environmental Legislation- Product Eco-responsibility Ordinance (Cap. 603). [Online]
Available at: http://www.epd.gov.hk/epd/english/laws_regulations/envir_legislation/leg_product.html
Financial Dispute Resolution Centre, n.d. Resolving Disputes- Dispute Resolution Process. [Online]
Available at: http://www.fdrc.org.hk/en/html/resolvingdisputes/resolvingdisputes_fdrsprocess.php?lang=en
Grand Pacific Holdings Ltd v Pacific China Holdings Ltd (in lig) (No. 1) (2012).
Law, B., n.d. Basic Law- Chapter IV : Political Structure. [Online]
Available at: http://www.basiclaw.gov.hk/en/basiclawtext/chapter_4.html
Ordinance., C. L.-. C. (. o. T. P., n.d. Contract Law- Contracts (Rights of Third Parties) Ordinance.. [Online]
Available at: https://www.elegislation.gov.hk/hk/cap623!en@2016-10-20T00:00:00
Ordinance, C. 6. C., 2014. Cap. 622 Companies Ordinance. [Online]
Available at: https://www.elegislation.gov.hk/hk/cap622
Re Petro China International (Hong Kong) Corp Ltd (2011).
Tadjudin Sunny v Bank of America, National Association (2016).
Williams v Jefferies Hong Kong Ltd (2013).