Connected Persons
Section 51B Bankrupctcy Ordinance
The following is the wording of the relevant section of the Bankruptcy Ordinance that defines connected persons. it defines connected persons in the context of bankruptcy, but it also defines connected persons in relation to the unfair preference provisions of s.266 of the Companies (Winding-up and Miscellaneous Provisions) Ordinance.
(1) For the purposes of sections 49 to 51A, any question whether a person is an associate of another person shall be determined in accordance with this section.
(2) A person is an associate of a debtor if that person is the debtor's spouse, or is a relative, or the spouse of a relative of the debtor or his spouse.
(3) A person is an associate of a debtor with whom he is in partnership, and of the spouse or a relative of any debtor with whom he is in partnership.
(4) A person is an associate of a debtor whom he employs or by whom he is employed and for this purpose, any director or other officer of a company shall be treated as employed by that company.
(5) A person in his capacity as trustee of a trust is an associate of a debtor if the beneficiaries of the trust include, or the terms of the trust confer a power that may be exercised for the benefit of, that debtor or an associate of that debtor.
(6) A company is an associate of a debtor if that debtor has control of it or if that debtor and persons who are his associates together have control of it.
(7) For the purposes of this section, a person is a relative of a debtor if he is that debtor's brother, sister, uncle, aunt, nephew, niece, lineal ancestor or lineal descendant, treating-
(a) any relationship of the half blood as a relationship of the whole blood and the step child or adopted child of any person as his child; and
(b) an illegitimate child as the legitimate child of his mother and reputed father, and references in this section to a spouse shall include a former spouse.
(8) For the purposes of this section, a debtor shall be taken to have control of a company if:-
(a) the directors of the company or of another company which has control of it (or any of them) are accustomed to act in accordance with his directions or instructions, but a debtor shall not be considered to have control of a company by reason only that the directors act on advice given by him in a professional capacity; or
(b) he is entitled to exercise, or control the exercise of, 1/3 or more of the voting power at any general meeting of the company or of another company which has control of it, and where 2 or more persons together satisfy either of the above conditions, they shall be taken to have control of the company.
(9) In this section, "company" includes any body corporate (whether incorporated in Hong Kong or elsewhere); and references to directors and other officers of a company and to voting power at any general meeting of a company shall have effect with any necessary modifications. (Added 76 of 1996 s. 36).