作者： admin

Dear Partners!

We found an interesting case recently happened and published by Inland Revenue department, that we would like to share with you.

Background

(a) Company A, Company B and Company C (collectively referred to as “the HK Companies”) are companies incorporated in Hong Kong. Their respective parent companies and common ultimate holding company are incorporated outside Hong Kong.

(b) The HK Companies are principally engaged in property investment. They collectively own a commercial building for long-term investment and letting purposes.

(c) The Group, of which the HK Companies are members, adopts a sole ownership holding structure where one property holding company holds the entire interest in one property. In order to standardize property holding structure, and enhance management and operational efficiency, the Group has planned to amalgamate Company B and Company C horizontally into Company A (“the Amalgamation”).

The arrangement

(a) Company B and Company C will be amalgamated into Company A by 30 June 2017.

(b) The Amalgamation is governed by the amalgamation provisions in Division 3 under Part 13 of the Companies Ordinance (Cap. 622). The legal effect of the Amalgamation on and after the effective date of the Amalgamation includes:

(i) Company B and Company C cease to exist as entities separate from Company A;

(ii) Company A succeeds to all property, rights and privileges, and all liabilities and obligations of Company B and Company C; and

(iii) Any agreement entered into by Company B and Company C may be enforced by or against Company A.

(c) After the Amalgamation, Company A, as a sole owner, will principally and solely engaged in the rental business of the entire building.

Source : The Government of the Hong Kong Special Administrative Region Inland Revenue Department Advance Ruling Case No. 62 dated 22 August 2017