Why Every Hong Kong Company Needs a Company Secretary
Hong Kong is an international economic hub as well as a gateway for foreigners to do business in mainland China. If you want to expand to Hong Kong, you are legally required to appoint a company secretary for your new company. This article will cover what a company secretary does, who can become one, and how to find the right one for you.
Why Is a Company Secretary a Legal Requirement?
Every company in Hong Kong must appoint a company secretary, as outlined in the Companies Ordinance. The Companies Ordinance is a piece of legislation that dictates how companies can be incorporated and operate in Hong Kong.
You cannot register a business without an appointed company secretary. Attempting to operate a business without a company secretary will result in fines and potential litigation, as outlined in the Companies Ordinance.
Roles and Responsibilities of a Company Secretary
The company secretary is the intermediary between your company and the government. They help you incorporate the company and keep company records in good order.
Do not be confused by the word "secretary," as the role is unrelated to that of an office secretary. A company secretary in Hong Kong is a professional who ensures your company's compliance with legal and regulatory obligations.
A company secretary typically implements instructions from the company director or legal advisor. Here are some of the primary responsibilities of a company secretary:
Initial Advisory and Incorporation Assistance
Provide representation and support for starting a business in Hong Kong.
Ensure the correct company structure, setup, and tax compliance.
Assist in opening company bank accounts.
Administration
Organise board meetings and take minutes.
Set up governance procedures.
Maintain statutory books.
Assist with changes in company name, address, and business type
Assist with appointments and resignations of directors and the secretary.
Establish communication between the company and regulatory bodies.
Ensure compliance with protection and privacy regulations.
Prepare written resolutions for the director to approve significant decisions.
Filing and Reporting
Prepare and file annual returns.
Ensure company registry filings are made correctly and in a timely fashion.
Manage and update shareholder records.
Monitor changes in regulatory requirements.
These represent the core responsibilities of a company secretary. Additional services may be available depending on your arrangement. We offer comprehensive support for establishing a new or existing business in Hong Kong, including the appointment of a dedicated company secretary.
What the Company Secretary Does Not Do
The company secretary ensures seamless communication between a company and Hong Kong's government agencies. They are not tasked with managing complex corporate activities; their role is primarily to execute them.
Activities such as introducing different classes of shares involve intricate legal considerations. They are best left to a legal advisor. As for handling regular company schedules, appointments, and team communication, those are the responsibilities of an executive assistant.
Who Can Be Appointed as a Company Secretary?
A company secretary can be a person residing in Hong Kong or a company with an office or place of business registered in Hong Kong.
Professional company secretaries operate on a know-your-customer (KYC) basis. Like any Hong Kong-based service provider, they must establish a holistic understanding of your business structure. Additionally, you may be asked to provide identification documents or extensive information about your business activities.
A sole director or shareholder cannot be the company secretary. They must appoint someone else as company secretary.
Note that providing company secretarial services as a business is a licensed activity, and the provider must hold a Trust or Company Service Provider (TCSP) Licence. However, an individual within the company serving as company secretary is not required to hold a TCSP License.
The Cost of a Company Secretary
A company secretary usually charges a base fee for their services. This basic package includes all the statutory requirements and essential administrative tasks necessary for compliance. Be aware that any fee will most likely exclude government fees.
Additional services are charged separately as part of a standard package or as requested. These services include activities such as changing your company's name, office, or directors, certificate preparation, and share allotment.
How To Find a Company Secretary
The most important aspect when searching for a professional company secretary is to ensure they hold a TCSP License. Only work with licensed professionals to ensure compliance and to receive a quality service.
Ideally, your company secretary should have undergone a formal corporate training program and have relevant work experience. They should know how to navigate Hong Kong's legal and corporate landscape with ease.
Since the company secretary is in charge of important legal files, they must be dependable and trustworthy. For instance, failure to submit your annual return by the due date would result in severe penalties.
Additionally, your company secretary must have excellent communication skills. They will be present during board meetings and should listen actively and provide guidance when necessary. Since they serve as the liaison between your company and various government departments, they have to effectively communicate information on all levels.
Final Thoughts
A company secretary is a legal requirement in Hong Kong, as they are the intermediary between the government and you. Since you must appoint a company secretary, you should look for a great one that will ensure your business operations are in accordance with the law.
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