ModelPlainEnglishArticlesofAssociationforHongKon.doc

Model Plain English Articles of Association for Hong Kong Bryane Michael, University of Hong Kong Introduction Hong Kong’s corporations have a market capitalisation of about $2.7 trillion. Over 1 million companies (both public and private) have incorporated in the city-state. Yet, one of the key documents used to incorporate a company, remains extremely antiquated. The Model Articles of Association (given to potential company founders) remains a cornerstone for the incorporation for companies past and present. A Google search of a sentence fragment from these Model Articles shows that many of Hong Kong’s largest and best known corporations use these Model Articles. Yet, these Model Articles remain unintelligible to even trained legal advisors. Laypersons who actually start the companies that operate in or from Hong Kong have little hope of understand these model Articles. Why Plain English Articles of Incorporation? Throughout most of the 20th century, Anglo-Saxon legal scholars and practitioners increased use a form of language intelligible to untrained lawyers. Such writing exhibits two traits particularly common in Form B of the Hong Kong Companies Ordinance. First, the Model Articles use long run-on sentences which combine “and”, semicolons and sub-ordinate phrases. Second, the Model Articles use of words like hitherto, herein, and so forth – making these long chains of sentences extremely difficult to interpret. Most legal drafting the US and UK have ditched such stilted drafting. Plain English Model Articles would help potential company founders – and current company secretaries – in three ways. First, plain English Model Articles would make the requirements imposed on directors and shareholders more transparent. Directors in Hong Kong need to refer to explanations of their duties because they can not read the Articles of their corporations directly. Second, plain English Model Articles would help foreign investors understand the obligations they s