What is a Company Secretary for Hong Kong companies?
The company secretary is a senior role in a Hong Kong company and must be appointed by the directors. The company secretary acts as a liaison between the Hong Kong Government and the company, ensuring that the company complies with all legal and regulatory requirements.
Does every Hong Kong company need to have a company secretary?
Yes, every Hong Kong Company is required to nominate a company secretary under section 154 of the Hong Kong Companies Ordinance.
If a Hong Kong company fails to nominate a company secretary and the position remains vacant, the company and its directors are liable to fines. This rule applies to dormant companies as well.
Who can be a company secretary?
There are 2 types of company secretaries for Hong Kong companies: an individual natural person acting as the company secretary and a corporate entity acting as the company secretary.
Individual company secretary:
An individual company secretary must be a Hong Kong resident. An individual who is already the director of the company can also act as the company secretary. However, if the company has only one sole director, then that sole director cannot also be nominated as the company secretary.
Corporate company secretary:
Corporate entities acting as the company secretary of a Hong Kong company must be a resident of Hong Kong. A corporate company secretary must hold a TCSP (Trust or Company Service Provider) Licensee.
What does a company secretary do?
The company secretary is the liaison between the company and government regulatory bodies such as the IRD (Inland Revenue Department) or the Hong Kong Companies Registry. It is the responsibility of the company secretary to ensure that the company is adhering to the legal requirements of the Hong Kong Companies Ordinance.
Key responsibilities of the company secretary includes:
- Maintaining the statutory records of the company such as the register of directors, register of members, register of company secretaries, register of charges, significant controller register
- Filing of forms to the Hong Kong Companies Registry to update corporate information, including any appointments or resignation of officers
- Filing of annual returns to the Hong Kong Companies Registry
An example of a Significant Controller Register of a Hong Kong Company. Source: cr.gov.hk
How is a Company Secretary appointed?
A first company secretary will be appointed when a company is first incorporated. The NNC1 Incorporation form will include a section for the appointment of the first company secretary.
If a company wishes to appoint a new company secretary, they need to file the Form ND2A “Notice of Change of Company Secretary and Director” to the Hong Kong Companies Registry within 15 days of the appointment.
What is the process of switching company secretary services?
The first step in the process of switching company secretaries involves completing KYC (Know-Your-Customer) procedures, which will usually involve:
- filling out a questionnaire regarding the business nature of the company
- identifying the UBOs (ultimate beneficial owners)
- disclosing the source of wealth of the UBO
- providing identification documents (passports or IDs)
Once KYC procedures have been completed, the new incoming company secretary service will prepare all necessary documents to remove the current outgoing company secretary and appoint themselves as the new company secretary. This document will need to be signed by one of the directors of the company.
After the change in company secretaries is completed, the new company secretary will contact the old company secretary for the transfer of the statutory records of the client company.
The entire process of switching company secretaries will usually take 3 to 4 business days.
Should a company outsource their company secretary position?
Whether a company should outsource their company secretary position depends on the needs of the company. For dormant companies with limited amount of paperwork, it will be more cost-effective to nominate an individual company secretary who is a Hong Kong resident.
If the company is active but the company is not large enough to justify the costs of a full-time company secretary or compliance staff, then it is much more cost effective to outsource this service for a fraction of the cost of a full-time employee.
A corporate company secretary service provider typically provides the following services:
- company Incorporation
- acting as the appointed company secretary
- provision of a registered office address
- preparation and filing of the annual returns
- filing of any changes in directors or director particulars such as address and identification documents
- deregistration of a company
How much does outsourcing the company secretary position cost?
The fees for using an outsourced company secretary service provider can range from as little as HK$1500 a year to HK$15000 a year. The fees will depend on the level of service required and the complexity of the company structure.
Simple company structures with a sole director and sole shareholder with minimal compliance need can take advantage of low-cost providers in the low range of fees. These service providers offer standardized services with staff stationed in Southeast Asia to keep costs low. These services will usually charge a separate fee for the filing of the annual return. While these service providers are cheaper, they often lack in knowledge and level of service.
Companies with multiple entities with slightly more complicated corporate structures will be best served by service providers attached to a CPA firm that offer a higher level of service and expertise. Company secretary services attached to a CPA firm will generally charge HK$4000 to HK$8000 per entity annually.
If you are looking to outsource your company secretary work, we would be glad to have a discussion with you.
Every company in Hong Kong is required by law to have a company secretary. The company secretary acts as the liaison between the company and government regulatory bodies, and is responsible for keeping the company’s regulatory filings up to date. The company secretary can be an individual Hong Kong resident or a corporate service provider holding a TCSP license. The price range for outsourced services can vary from company to company depending on the level of service required. It is crucial for companies to find the right company secretary service provider to stay compliant while doing business in Hong Kong.