### Companies Ordinance 《公司條例》

293. Certain amount relating to insurance company with long term business to be regarded as realized profit or loss
(1) This section applies to a company that is an insurer and carries on long term business.
(2) For the purposes of this Part—
(a) an amount properly transferred to the statement of comprehensive income of the company from a surplus in the fund maintained by it in respect of the long term business is to be regarded as a realized profit; and
(b) a deficit in that fund is to be regarded as a realized loss.
(3) Subject to subsection (2), any profit or loss arising in the company’s long term business is to be disregarded for the purposes of this Part.
(4) In this section—
(a) a reference to a surplus in a fund maintained by a company is a reference to an excess of the assets representing the fund over the company’s liabilities attributable to its long term business, as shown by an actuarial investigation; and
(b) a reference to a deficit in such a fund is a reference to an excess of those liabilities over those assets, as shown by an actuarial investigation.
(5) In this section—
actuarial investigation (精算調查) means an investigation—
(a) made under section 18 of the Insurance Ordinance (Cap. 41); or (Amended 12 of 2015 s. 166)
(b) made pursuant to a requirement imposed under section 32 of that Ordinance;

insurer (保險人) has the meaning given by section 2(1) and (2) of the Insurance Ordinance (Cap. 41); (Amended 12 of 2015 s. 166)
long term business (長期業務) has the meaning given by section 2(1) of the Insurance Ordinance (Cap. 41). (Amended 12 of 2015 s. 166)

294. Distribution in kind: certain amount to be regarded as realized profit
If a company makes a distribution consisting of or including a non-cash asset, and any part of the amount at which the asset is stated in the referential financial statements represents an unrealized profit, that part of that amount is to be regarded as a realized profit for the purpose of determining, before or after the distribution, the lawfulness of the distribution in accordance with this Part.

### Companies Ordinance 《公司條例》

295. Application of Part
(1) This Part applies in relation to a distribution made on or after the commencement date# of this Part, except a distribution specified in subsection (2).
(2) The excepted distribution is a distribution the amount of which would, had this Part applied in relation to the distribution, be determined under section 302 by reference to the financial items as stated in any financial statements for a financial year or period beginning before the commencement date# of this Part.
Editorial Note:
# Commencement date: 3 March 2014.

296. Saving for other restraints on distribution
This Part does not affect any Ordinance or rule of law, or any provision of a company’s articles, restricting the sums out of which, or the cases in which, a distribution may be made.

297. Prohibition on certain distributions
(1) A company may only make a distribution out of profits available for distribution.
(2) For the purposes of this section, a company’s profits available for distribution are its accumulated, realized profits, so far as not previously utilized by distribution or capitalization, less its accumulated, realized losses, so far as not previously written off in a reduction or reorganization of capital.

298. Listed company may only make certain distributions
(1) A listed company may only make a distribution—
(a) if the amount of its net assets is not less than the aggregate of its called up share capital and undistributable reserves; and
(b) if, and to the extent that, the distribution does not reduce the amount of those assets to an amount less than that aggregate.
(2) A listed company must not include any uncalled share capital as an asset for the purpose of determining the amount of its net assets under this section.

299. Restriction on application of unrealized profits
A company must not apply an unrealized profit in paying up debentures or in paying up any amount unpaid on its issued shares.

300. Financial Secretary may modify or exempt provisions in relation to investment company
(1) On application by an investment company, the Financial Secretary may—
(a) modify, in relation to the company, any of the prohibitions or restrictions in section 297, 298 or 299; or
(b) exempt the company from any of such prohibitions or restrictions.
(2) The Financial Secretary may make a modification or exemption under subsection (1) subject to any terms and conditions that the Financial Secretary thinks fit.
(3) In this section—
investment company (投資公司) means a listed company whose principal business consists of investing its funds in securities, land or other assets with the aim of—
(a) spreading investment risk; and
(b) giving its members the benefit of the results of the management of the assets.

### Companies Ordinance 《公司條例》

301. Consequences of unlawful distribution
(1) This section applies if—
(a) a company makes a distribution, or part of a distribution, to one of its members in contravention of—
(i) section 297, 298 or 299; or
(ii) a prohibition or restriction in that section as modified under section 300; and
(b) at the time of the distribution, the member knows or has reasonable grounds for believing that the distribution, or that part of the distribution (as the case may be) is made in contravention of that section or modified prohibition or restriction.
(2) If the distribution is made in cash, the member is liable to repay the distribution, or that part of the distribution (as the case may be) to the company.
(3) If the distribution is made otherwise than in cash, the member is liable to pay to the company a sum equal to the value of the distribution or that part of the distribution (as the case may be) at the time of the distribution.
(4) This section does not affect any obligation otherwise imposed on a member of a company to repay a distribution unlawfully made to the member.
(5) This section does not apply in relation to—
(a) any payment made by a company in respect of the redemption or buy-back by the company of shares in itself; or
(b) any financial assistance given by a company in contravention of section 275.

302. Justification of distribution by reference to financial statements
The amount of a distribution that may be made without contravening section 297, 298 or 299, or a prohibition or restriction in that section as modified under section 300, is to be determined by reference to the financial items as stated in the financial statements specified in Division 4.