What is a Company Secretary for Hong Kong companies?
The company secretary (also known as a chartered secretary) is a senior role in a Hong Kong company that primarily acts as a point of contact between the company and Hong Kong government bodies, and must be appointed by the company directors. Company secretaries are there to make sure the company in their charge is compliant with all government regulations relevant to their industry and to help keep the board of directors organized.
Why do I need a company secretary?
Every Hong Kong Company is required by law 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.
There are of course benefits to having a company secretary besides being compliant. For new businesses, company secretaries are a wealth of knowledge that the board of directors can turn to for advice.
For foreign owners, company secretaries are invaluable as their Hong Kong representative, keeping them updated on any regulation changes that may affect their business.
Who can be a company secretary?
There are 2 types of company secretaries for Hong Kong companies: an individual (aka. A natural person) acting as the company secretary and a corporate entity acting as the company secretary.
What is an Individual Company Secretary?
An individual (natural person) that plays the role of company secretary must be a Hong Kong resident. This individual can be a director of the company and also act as the company secretary if there is more than one director. However, if the company has only a single director, that director cannot act as the company secretary.
Individuals that act as company secretaries must meet at least one of the following requirements:
- Be a member of the Hong Kong Institute of Chartered Secretaries (HKICS)
- Be a practicing solicitor
- Be a Certified Public Accountant (CPA)
- Have experience in the position of secretary of a public company for at least 3 out of 5 years preceding their appointment
- A senior member of your company that is not also the sole director
What makes someone a good company secretary?
A good company secretary for your business will be someone who understands how your business works and how your industry works (especially important for insurance brokers, businesses with an SFC license, and listed companies). This allows the company secretary to foresee any legal complications you might encounter and can help you navigate through them. A good company secretary will also be highly organized and be able to bring up any past documents when they are needed.
What is a Corporate Company Secretary?
Corporate entities acting as the company secretary of a Hong Kong company are often CPA firms or lawyer firms that offer the service on the side. Firms that offer the corporate company secretary service must have a business address in Hong Kong and hold a TCSP (Trust or Company Service Provider) license.
Should I outsource the company secretary position?
Outsourcing the company secretary position depends on the needs of your company, including size of your business and its complexity. For example, if your company has two directors and is largely dormant with limited paperwork, making one of the directors the company secretary may be the most cost effective option.
However, if your company is active, then it may be more efficient to outsource the position, as you can get the same service at a fraction of the cost of hiring a full-time employee.
If you are a one-man-band starting your own company, another good option is to pay for the services of online company secretaries like Sleek and Osome.
CPA firms like Yau and Wong typically service small to medium-sized active businesses, or businesses that have outgrown their current company secretary.
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$1,500 per year to upwards of HK$15,000 per year, depending on the level of service required and the complexity of your company’s structure.
Simple company structures with a sole director and sole shareholder with minimal compliance need can take advantage of low-cost providers in the lower range of fees. These service providers often offer standardized services with staff stationed in Southeast Asia to keep costs low, and will usually charge a separate fee for the filing of the annual return. While these service providers are cheaper, they often lack in-depth knowledge and offer a very basic level of service.
Companies with multiple entities and slightly more complicated corporate structures would be best served by providers attached to a CPA firm that offer a higher level of service and expertise. These service providers will generally charge between HK$4,000 and HK$8,000 per entity annually.
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.
A company secretary’s key responsibilities include:
| Key Responsibilities | Description |
| Compliance | Ensuring your business follows and stays updated with all local regulations in general and relevant to your industry. |
| Communication | Acting as a point of contact between your company and government entities, keeping all stakeholders updated on government rules and regulations. |
| Internal Governance | Scheduling and attending board meetings, preparing minutes, and ensuring that decisions made are in line with both company policies and Hong Kong laws. |
| Governance Advising | Helping shape company policy and strategy via advising the board. |
| Share Management | Managing share allocation and transfers while making sure share movements are properly documented and compliant with local law. |
| Statutory Books & Records | Maintaining the company’s statutory books, including registers, resolutions, meeting minutes and financial statements, making sure they are up-to-date and available any time they are required. |
| Annual Returns | Ensuring that annual returns and all relevant documents are submitted on time to the relevant authorities. |
| Company Seal Management | Ensuring all company chops and seals are secure, recording when and how they are used, and ensuring they are only used when authorized. |
| Structural Changes | Submitting forms to the Company Registry in cases of changes in company structure, directors or addresses. |
| Dissolution Assistance | Assisting in the dissolution of a company in a legally compliant manner. |
How is a Company Secretary appointed?
Your company secretary will be appointed when your company is first incorporated via the NNC1 Incorporation Form.
Later on, if you wish to appoint a replacement company secretary, they will need to file the Form ND2A “Notice of Change of Company Secretary and Director” to the Hong Kong Companies Registry within 15 days of their 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 given by your new company secretary to understand the nature of your business
- Identifying the UBOs (ultimate beneficial owners)
- Disclosing the source of wealth of the UBO
- Providing identification documents (passports or IDs)
Once the 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. These documents will need to be signed by one of the directors of your company.
After the change in company secretaries is completed, the new company secretary will contact the old company secretary for the transfer of your company’s statutory records, the entire process of which usually takes 3 to 4 business days.
Conclusion
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. Whether you choose to nominate an individual or a corporation to play the role of company secretary, there is a wide range of prices and service types to match your business’ needs, helping your business stay compliant.
If you’re looking for a company secretary, let’s chat!
