Why is it essential to have a company secretary in Hong Kong?

Varun Hariharan

20 Nov, 2020

Every country has different forms of entities operating under their respective laws. To comply with respective laws, companies would have officers known as company secretaries. Hong Kong is one of the largest financial powerhouses in the world. Due to this, many foreign investors want to set up offices in Hong Kong. To comply with the regulations of the Companies Ordinance of Hong Kong, it is crucial to have a company secretary in Hong Kong.

Taking company secretary services will help your company comply with respective corporate and governance laws.

Types of Entities which require a company secretary in Hong Kong

There are different forms of entities which require a company secretary:

• Private Limited company
• Public Limited Company
• Offshore Companies
• Foreign Companies
• Partnerships (LLP)

Private Limited Company- A private limited company is a company limited by shares. This form of entity does not have its shares listed in a public stock exchange.  Every private limited company has a company secretary in Hong Kong.

Public Limited Company- A public limited company is an entity which has its shares listed in a public stock exchange. Shares of a public company are offered to shareholders. Every public limited company must appoint a company secretary in Hong Kong.

Offshore company- An offshore company is usually present in tax havens. Offshore companies are established with the sole purpose of saving tax. These companies operate under normal conditions. Every offshore company would require to appoint a company secretary in Hong Kong. Hence an offshore company must appoint an individual to carry out company secretary services.

Foreign Companies- Any form of company that is established outside the jurisdiction of Hong Kong is known as a foreign company or an international company. A foreign company would have international directors and shareholders. An international company has to comply with the requirements of Hong Kong law. Hence an international company must appoint a company secretary in Hong Kong.

Partnerships (LLP)-  Limited Liability Partnerships are entities which enjoy the benefits offered by a private limited company and a traditional partnership. The liability of partners under an LLP is limited. Hence, no form of personal liability is present under this form of entity. Every LLP in Hong Kong requires taking company secretary services. To comply with relevant provisions of law, appointing a company secretary for an LLP is mandatory.

What is the main law for a company secretary in Hong Kong?

In Hong Kong, corporate entities are regulated by the Companies Ordinance (Cap 622). Hence any form of entity which is incorporated under Hong Kong has to comply with the above legislation.

When a company or entity appoints a company secretary, then the appointment has to comply with the provisions of the Companies Ordinance (Cap 622)^[1].

Under section 474(1) of the ordinance, every company must appoint a company secretary. Hence from the above, it is clear that every company or entity incorporated in Hong Kong requires a company secretary.

The appointment of a company secretary in Hong Kong must be filed with the registrar of companies. Such provision is present under section 67(1) of the Companies Ordinance in Hong Kong.

The appointment of a company secretary must be in accordance with the provisions of the ordinance. A company secretary can act as a deputy company secretary. This provision is present under section 474(4) and section 474(5) of the companies’ ordinance.

If the company has not appointed a company secretary within a few months of incorporation, then the registrar of companies would appoint a company secretary to carry out the operations of the company.

How can a company secretary in Hong Kong assist your company?

Under the Companies Ordinance of Hong Kong, it is mandatory to appoint a company secretary. Hence the company secretary in Hong Kong will help your company comply with the requirements of the ordinance from time to time.

However, the following reasons below provide us with the main reasons to appoint a company secretary:

• Legal Compliance- Legal compliance is one of the main reasons for appointing a company secretary in Hong Kong. Company Secretaries would not only help the company to comply with the law, but also assist in procedures that affect the day to day operations of the company. However, it is also a legal requirement under the Companies Ordinance to appoint a company secretary. Under section 474 of the Companies Ordinance, it is mandatory to appoint a company secretary. Once the appointment is carried out, the same has to be filed with the registrar of companies.
  
• Carry out Different Procedures- An executive such as the company secretary will assist the company with day to day procedures.

This will include the following:

• Assist the Board with the procedures related to the meeting.
• Take the minutes of the meeting.
• Sign respective documents which include the resolutions taken in the meeting.
• File respective resolutions with the Registrar of Companies.
• Provide legal assistance and compliance to the company.
• Assist the directors and shareholders of the company with other procedural compliance.
• Look after the Affairs of the Company- An executive such as the company secretary must look after the affairs of the company. This will include all sorts of responsibilities assigned to the company secretary.

The following responsibilities have to be carried out by a company secretary in Hong Kong:

• Administrative Responsibilities;
• Legal Responsibilities;
• Accounting Responsibilities; and
• Executive Responsibilities.

What are the requirements for the company to appoint a company secretary in Hong Kong?

A company has to comply with the provisions of the ordinance. Hence, the company must appoint a company secretary in compliance with the provisions of the ordinance. If the company breaches any rules related to the appointment, then the company would be penalised. Therefore, every company must follow the requirements of the ordinance for appointing a company secretary.

 The following requirements have to be followed by the company

• Appointment of the Company Secretary has to be according to the Companies ordinance.
• A company secretary has to be a permanent resident and a citizen in Hong Kong Special Administrative Region (HK SAR).
• Every Company requires appointing a company secretary. This requirement is present under section 474 of Companies Ordinance of Hong Kong.
• A natural person can be appointed as a company secretary in Hong Kong. The meaning of natural person is included under the Companies Ordinance of Hong Kong. Any individual who is not considered an artificial legal person is a natural person.
• Any Company or a Body corporate can be appointed as a company secretary in Hong Kong. However, if a body corporate is appointed as a company secretary, then its office must be present in Hong Kong. Apart from this, its business operations must be conducted in Hong Kong.
• Any director or shareholder of the company can also be appointed as a company secretary for the company. However, this appointment would be subject to different forms of checks by the company. Such checks would include any form of conflict of interests and contracts entered into by the director of the company. Section 476(1) of the Companies Ordinance (Cap 622) has this provision.
• As mentioned earlier, a body corporate or a company can be appointed as a company secretary. This would only apply to companies that have more than one director. If only one director is present for the company, then such a company cannot be appointed as a company secretary.
  • For example if X is appointed as a company secretary in Hong Kong for a particular company and if X is the only director of the company, then such appointment would be void and not allowed by the registrar of companies.
  • If an individual X is appointed as a director of a company ABC and if another company XYZ is appointed as a company secretary for ABC, then such appointment of a company secretary in Hong Kong is permitted.
• The company has to ensure to keep with the registrars of companies official records of the company secretary appointment.

This register can be kept in the following languages:

• English;
• Mandarin; or
• Chinese.
• If a company secretary is an individual, then documents such as the permanent resident card of the individual must be provided to the registrar of companies. Apart from this, other residence documents must also be filed with the registrar of companies. This information would also include the correspondence address. Other form of information such as the passport may be requested by the companies’ registry.

How is a Company Secretary Appointed for a company?

The appointment of a company secretary has to be as per the provisions of the Companies Ordinance of Hong Kong (Cap 622). All companies have to follow the procedure for the appointment of a company secretary in Hong Kong.

The following procedure must be followed for the appointment of a company secretary in Hong Kong:

• Compliance has to be met by the company in appointing the company secretary in Hong Kong. The appointment has to be made in accordance to section 474 of the Companies Ordinance of Hong Kong.
• A resolution has to be passed in the Board Meeting regarding the appointment of the company secretary.
• Once this resolution is passed in the board meeting, the same has to be approved in the general meeting.
• If the company does not take the necessary steps in appointing a company secretary, then the registrar of companies would take over the process of appointing a company secretary.
• As per section 476(1) of the companies’ ordinance of Hong Kong, the registrar has the power to appoint a company secretary for the company.        
• When the registrar is appointing the company secretary, then such appointment must be according to the provisions of section 474 of the companies’ ordinance.

What are the duties of a company secretary?

A company secretary has to fulfil the obligations for the company.

 The following duties have to be carried out by a company secretary:

Taking the meetings- Meetings which happen in the company will include the annual general meeting, extra-ordinary general meeting and board meetings. The company secretary has to ensure that compliance is maintained and carried out when conducting the meetings of the company. Apart from this, the company secretary is also responsible to take note of the resolutions taken by the company in the meeting.

Taking Minutes- Every meeting would be timed and recorded as per the requirements of the companies’ ordinance of Hong Kong. Timing and taking record of the meetings is known as taking minutes of a board meeting or an annual general meeting. A company secretary is required to take minutes of the board meeting and annual general meeting. After the minutes of the meeting are taken, the company secretary is responsible to furnish details of the minutes meeting to the registrar of companies.

Furnishing Details and Compliances with the Registrar- When resolutions are taken in board meetings, then same has to be filed with the registrar of companies.

Details and information which have to be filed by the company secretary with the company would include the following:

• Any form of resolution taken by the company.
• Any form of finances which are cleared with the company.
• Minutes of the board meetings.
• Respective forms also have to be filed with the registrar of companies.

Liaising with Different Authorities- A Company appoints a company secretary in Hong Kong not to just follow compliance with the respective norms under the companies’ ordinance. Company secretary have to liaise with different authorities. These authorities would include government authorities, regulatory authorities and tax authorities.

Conclusion

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