Company Secretary in Hong Kong: All you need to know
Are you planning to incorporate a limited company in Hong Kong? If so, according to the Hong Kong Companies Ordinance, you need to appoint a local company secretary. But what is a company secretary exactly? What do they do, and do you need one? Read on to find out more.
What is a Company Secretary?
The company secretary is a company representative who will report to the Companies Registry any change in the structure of a company and its key personnel data (i.e. its directors and shareholders).
Be careful not to mix up a “company secretary” with a “secretary” who may only handle clerical duties. An officially appointed company secretary of a company plays a much more advanced role in the legal maintenance of a company.
Do I Have To Appoint A Company Secretary?
Yes! By law, according to the Companies Ordinance, every private company incorporated in Hong Kong must have a company secretary. You won’t be able to incorporate without one, and a company is required to retain one throughout its lifetime.
What Does A Company Secretary Do?
It is the role of a company secretary to ensure that companies comply with their legal obligations. More specifically, a company secretary should help to maintain a company’s statutory records and registers and continue to update them as needed.
Responsibilities of the company secretary usually include:
- Managing shareholders and board of directors minutes;
- Managing company’s change of name and change of registered address;
- Reporting directors and shareholders’ change of particulars;
- Appointing new directors and reporting existing director’s cessation;
- Organizing transfer of shares, shares allotment, as well as capital increase;
- Preparing and filing annual returns;
- Maintaining and updating company statutory books and records (i.e. Register of Directors, Register of Shareholders, Significant Controller’s Register, etc.);
- Handling administrative mails (if you use their Registered Office – note it is recommended to do so as your Company Secretary will usually update you and tell you what to do with such mails).
Who Can Be A Company Secretary?
Either an individual or a body corporate can be a company secretary but bear in mind:
- The sole director of a private company cannot also be the company secretary (i.e. one of the company’s directors can be the company secretary only if there is more than one director in place);
- If the company secretary is a natural person, he or she must be a resident in Hong Kong (permanent or otherwise);
- If the company secretary is a corporate body, its registered address or principal office should be in Hong Kong. While it must also hold a valid Trust or Company Service Provider Licence (a.k.a. TCSP licence) issued by the Companies Registry.
How Do I Choose A Company Secretary?
First and foremost, keep in mind that a company secretary should know what they are doing – you shouldn’t just appoint any random to take the job! The various maintenance matters a company secretary handles are not difficult. However, there are plenty of deadlines and details to consider when preparing documentation for filing and when making updates to company records.
That said, as the role implies some knowledge and experience, if you appoint an individual, be sure that he/she has the relevant background. Alternatively, if you opt to hire a service provider, you’ll want to check they have the proper licence in place. You can do this by searching their name in the TCSP Registry (note: some providers may use trade names, so you might have to ask for their licence number to search).
Who you appoint as company secretary is not a decision to be taken anyhow. Make sure to appoint someone who can properly assist. Otherwise, you risk exposing your company to possible mistakes and delays that may result in unnecessary costs.
Individual vs Company Service Provider
A dedicated individual with experience can do the job just as well as a company service provider. However, most people will not know an individual who knows how to handle such matters. Typically, except for big companies who can afford to employ an in-house duly qualified company secretary, company secretarial work is usually handled by an appointed external professional with experience and expertise in handling company secretarial duties.
Considering the low average cost of corporate services providers, it is recommended to subcontract to avoid mistakes and delays and save time that would be better dedicated to business development. There is no shortage of options to choose from but choosing the right provider is a whole other story. Aside from checking they are properly licenced, here are some other key points to consider when selecting a corporate services provider.
Professionalism and Experience
Get to know the provider who will be helping maintain a company. A great deal of professionalism and experience is a must. How to check and compare? Send the same email requesting quote and raising any queries as necessary to various providers and see who responds in a complete and timely manner. If a provider answers haphazardly and late, then it is probably best to avoid them. The first interactions with a service provider serve as a good preview of what’s to come.
Value for Money
Pricing is important, but it isn’t everything. While considering pricing, do also consider what services are offered along with the professionalism and experience of the provider (as mentioned above!).Generally, providers offer a very similar, if not the same, suite of services. However, it is still important to check as it is easier to deal with one service provider rather than many. That said, the main difference in terms of service will likely be in the amount of advice a provider can offer; the more advice, the more expensive.
Note more advice at a higher cost is not necessary for all; those on a budget can opt for a more affordable provider that offers excellent quality services, free information and general guidance (like iNCUBEE! But not necessarily :)) as the end result will be the same, only that service will be different. Just like on an airplane, those in first class receive extra care and attention, while those in economy receive less but at the end of the day, all passengers leave and get to their chosen destination at the same time.
Make a Wise Choice
In summary, the maintenance of a company is not to be taken lightly. While there are fewer regulations and requirements for Hong Kong companies compared to in other jurisdictions worldwide, it still takes time, expertise, and knowledge to ensure a company is kept up to date. As such, it may be beneficial to obtain the help of a corporate service provider.
Not all corporate service providers are the same; however, some are better or maybe more suitable for an entrepreneur’s particular needs than others. So it is essential to weigh up the options and take into account professionalism and experience, and value for money before making a decision.
Do you have an existing company and want to appoint iNCUBEE as its company secretary?
Or feel free to contact us. The iNCUBEE Team will be pleased to answer you.