In order to change a company’s secretarial obligations, there are several conditions that have to be met:
- a new company secretary must be at least 18 years old (If the company secretary is not a business entity)
- all applications for a Certificate of Incorporation have to be submitted before the date when said business entity would be considered in default under section 183 of the Companies Ordinance (Cap. 622) and
- if required by the Registrar of Companies, an affidavit from the person applying to be named as the company’s secretary attesting that he/she meets all statutory requirements for being a company secretary.
There is also a change of address requirement which you need to change with both Companies Registry and Inland Revenue
Setting up a company is not something that you can do on the spur of the moment – change in circumstances or not, when you change your company secretary, it will be necessary to change other parts of your business registration at the same time in order to maintain continuity.
For both large and small companies this is an important process; even if the person wishing to change the name of their company’s secretary follows all of these steps perfectly, they may still find themselves in trouble with authorities like Companies Registry and Inland Revenue Authority.
When changing your company secretary, follow these steps carefully:
1) Change Name Details
This is optional, but if you intend to also change the name of your company, changing the company name is very first step when changing a company secretary.
In order to change a company’s name, there are several conditions that have to be met:
- The change of name must not result in unfair advantage or cause detriment to other parties
- All applications for change of name have to be submitted before the date when said business entity would be considered in default under section 183 of the Companies Ordinance (Cap. 622).
In addition, a change of name can only be done when an application for a change of corporate secretary has also been submitted simultaneously or before the change of name.
If you change your corporate secretaries, then change your company’s name as simultaneously as possible to remove any bureaucratic headaches.
2) Select a New Company Secretary
Your company needs to have a company secretary to be incorporated in Hong Kong.
Changing your company secretary doesn’t absolve your company of these requirements.
So, be sure you know who you want next to be your company secretary.
3) Update Change of Address
Update your change of address with the Registrar of Companies.
This can be done by sending in form COA2 or using an online application on their website.
The email address for them is [email protected] if after you send in form COA2 you still have no update showing up, then email them your company name, your old address, and your new address.
Also, when you are doing this step, remember to also change the address on file with The Inland Revenue Department (IRD) because they use the same services as the Registrar of Companies.
4) Amend the Articles of Association
The Board must always ensure that the Memorandum and Articles of Association are consistent with all current legislation.
If there is a change in legislation or any part becomes obsolete, then it is discussed by the Board and approved in order to amend the Memorandum and Articles of Association.
At this point, a new Articles of Association and Company Memorandum can be delivered for future corporate governance with the new company secretary.
5) File for a New Certificate of Incorporation
When you are setting up your corporation, there are many steps that need to be followed in order for the business entity to be legitimate.
Start by filing a certificate of incorporation with your Secretary of State or another corporate filing office.
This is generally accomplished with the help of an attorney who will also organize the subsidiary records, including, if necessary, a shareholders meeting to approve the issuance of shares.
Once these records are complete and filed with your Secretary of State or another office, all paperwork will be transmitted to you for your records.
The next step would be to file any necessary change name papers in foreign countries where you intend on doing business.
This is usually straightforward but does require a little more work on your part as you are essentially repeating step 1 but in foreign jurisdictions.
6) Update Your Bank Details
The Registrar of Companies and the Inland Revenue Department have a duty to ensure that all corporations file their returns on time.
For corporations that do not file their returns for a consecutive period of two years, the corporations will be struck off from the Registry of companies by operation of law after 28 days from the date of issue of notice by the Registrar.
In other words, a company will be dissolved.
So, once you’ve changed your company secretary, don’t forget to update your bank details.
Most companies are looking for a better experience with their corporate governance, including making a more digital one.
Change your company secretary to Air Corporate and start your digital corporate governance in style.
Hong Kong has a number of procedures and legislation that guide companies in the process of share capital reduction, but it is ultimately a simple procedure that can save your company from running into financial trouble or going bankrupt.
Share Capital Reduction is often used by start-up businesses to save on fees while they’re trying to get their feet off the ground, but larger companies may also wish to capitalize on this process.
Share Capital Reduction must first be approved by the company’s Board of Directors.
Following this, a shareholders’ meeting will have to be called in order to vote upon the proposal.
All orders for share capital reduction are made through the Registrar of Companies.
The company has one month to submit all the necessary paperwork and the required minimum of Directors must be present.
The process often takes around one month, but sometimes more time will need to be given as it must follow very strict procedures in order for the changes to register correctly on the company’s records.
Steps to Share Capital Reduction in Hong Kong
- The Company must first approve share capital reduction proposal by the company’s Board of Directors
- The Shareholders then have to be notified and called for a shareholders’ meeting to vote on the proposal
- After share capital reduction, all orders are made through the Registrar of Companies
- Share capital reduction must follow very strict procedures to register changes correctly
- Any remaining shares will be transferred to the company’s treasury account after all steps have been completed successfully
After these steps are completed successfully, any remaining shares will be transferred to the company’s treasury account.
Why reduce share capital?
Share Capital Reduction can be useful for many reasons.
Share capital reduction reduces the number of shareholders, which means that each shareholder will hold a greater proportionate share in the company.
Share capital reduction is often used to reduce running costs because fees are calculated on the total shareholding of an organization.
Share capital reduction changes back to Share Capital Increase if it is required in the company’s future.
Share Capital Reduction can be a simple and effective way to save your business from going out of business.
Share capital reduction is an excellent strategy that can be beneficial for many reasons including reducing expenses, increasing the percentage of shares owned by shareholders, and avoiding bankruptcy due to various fees calculated on a company’s shareholding.
Share capital reduction will not be successful if it is carried out to avoid creditors or save the business from bankruptcy.
Share capital reduction must follow strict procedures and must be approved by the company’s Board of Directors before being put to a shareholders’ meeting for voting.
Share Capital Reduction can take 1 month or more as it follows very specific procedures.
Share capital reduction is not only beneficial because it reduces expenses, but also because it increases the percentage of shares owned by shareholders.
Share Capital Reduction can be carried out to avoid creditors or save the business from bankruptcy, but this will ultimately cause Share Capital Reduction to fail.
Share Capital Reduction always follows strict procedures and must first be approved by the company’s Board of Directors before being put to a shareholders’ meeting for voting.
Share Capital Reduction always takes 1 month or more to complete, but Share Capital Reduction should never take longer than necessary as procedures must be followed correctly in order to register changes correctly on the company’s records.
Share Capital Reduction can be beneficial because it reduces expenses, increases share ownership percentage, avoids bankruptcy fees, saves the business if necessary, and Share Capital Reduction can be carried out in order to avoid creditors or save the business from bankruptcy.
Share capital reduction is an excellent strategy that every company should consider using when reducing their expenses becomes a necessity.
Are you looking to open a business in Hong Kong but don’t want to deal with this type of corporate governance on your own?
Register your business with Air Corporate today and we’ll always be there to handle all your administrative needs.
The global e-Commerce market is experiencing rapid growth as global sales are expected to hit $4.891 trillion, marking a 14.3% increase in the previous year.
Many countries have been significantly contributing towards this market growth.
The e-Commerce explosion is largely attributed to the rising use of mobile devices worldwide.
Without the use of mobile applications, consumers and businesses would not be able to buy and sell over the internet so easily.
Now is the best time ever to take your e-Commerce business to the next level as you can now benefit from more advanced technology, streamlined cross-border shipping, and logistics.
A study conducted by eMarketer has estimated that the Asia-Pacific religion will produce over $4 trillion in e-commerce sales by 2024, which will make up nearly 65.9% of the global market e-Commerce sales.
China is currently the world’s largest e-commerce market, contributing to nearly 52.1% of all e-commerce sales worldwide.
China has the biggest portion of global e-Commerce size and sales, but it also has quite a dominant leader as the largest e-commerce market in the world, outranking e-Commerce transactions in the United States, Germany, France, Japan the United Kingdom combined.
One of the main reasons why the e-Commerce market is thriving in China is due to the country’s leading manufacturing industry, logistic infrastructure, and government support.
Internet usage has also dramatically increased amongst the Chinese population as the country currently has more than 800 million users.
Moreover, these 800 million internet users prefer online shopping as more than 70% of China’s internet users had made an online purchase in 2018.
China is also home to the e-commerce giant Alibaba, which has developed efficient systems and networks to process online orders and delivery.
Alibaba has a huge network of delivery which allows the company to process up to 30 million items each day.
Japan is one of the largest and fast-growing e-Commerce markets globally, contributing to the global growth rate of the e-Commerce market by 29%.
The Japanese e-commerce market generated total revenue of US$114 billion in 2020, putting the country right behind the United States.
The e-Commerce market in Japan has been traditionally dominated by business-to-business transactions.
However, there has been increasing growth in online sales of physical goods within the business to the consumer market.
The consumer-to-consumer market is also expected to grow as demand for digitally distributed services such as travel tickets continuously increases.
JP Morgan has also estimated that e-Commerce sales in Japan will continue to expand at an annual growth rate of 6.2%, and the total market revenue is expected to reach $143.297 billion by 2025.
Japan has constantly been ranked as one of the top 5 largest e-commerce markets in the world due to its rapidly growing developed economy, urbanized population, and high internet penetration rate, which applies to both the younger and older population.
Japan’s top three e-Commerce platforms include Rakuten, Yahoo! and Amazon.
Singapore has a high tax rate and a requirement for a resident director for a company that can serve as a disincentive to start an e-Commerce business.
However, many other aspects make Singapore a rapidly growing financial hub in South East Asia where the e-Commerce gross merchandise value is expected to double to US$ 254 billion, according to the Sync Southeast Asia Report.
There are many opportunities to gain investment from venture capitals in Singapore which incentivize setting up an e-commerce business in the country and has contributed to the boost in the e-Commerce market value.
Another way business owners are benefiting is through the exemptions that may apply to their company depending on its size and revenue, which can lower the corporate tax rate down to 0%.
4. South Korea
South Korea is among the largest e-commerce markets in the world, powered by a population with a 92% internet usage rate.
During the Covid-19 pandemic, GlobalData’s E-Commerce Analytics reported that over lockdown, the number of e-commerce transactions increased by 22.2% in 2020 and are expected to grow in the following year by 25.4% in 2021.
The largest e-Commerce market segments are fashion, sporting goods, toys, cosmetics, and DIY products.
South Korea is also considered one of the top 10 business-friendly and technologically advanced economics globally, which makes starting an e-commerce business in the country an extremely easy and profitable business venture.
5. Hong Kong
Hong Kong has a thriving online market where the market volume for an e-Commerce business is expected to stand at approximately US 11 million by 2025.
You can benefit from many opportunities by opening an e-Commerce business in Hong Kong as you also have access to Mainland China.
Hong Kong is one of the world’s leading digital cities makes it a great place for e-Commerce as the population is heavily dependant on technology and online shopping.
The country also offers a favorable tax system to relieve a huge financial burden in terms of taxes as Hong Kong is a highly popular low-tax jurisdiction
Moreover, the country also has a strong logistic infrastructure to meet the increasing demand for online transactions.
This includes highly developed transportation systems, supply chains, and warehousing, ensuring secure storage and easy order shipments.
Lastly, Hong Kong has an extremely easy company incorporation process which is a huge convenience compared to other jurisdictions.
All you need to do is upload the correct documents and fill in the necessary information on the online application to start your e-commerce business.
6. United States
The United States has been a strong contender in the leading countries for e-Commerce and currently stands as the second largest e-commerce market in the world powered by online giants like Amazon and eBay.
As the most developed market for online shopping, engaging in online commercial transactions to purchase goods and services is a norm for American consumers.
The US is known for its business-friendly environment due to lower-income and corporate taxes, which act as a huge financial incentive for those looking to start an eCommerce business.
Saving up on taxes allows e-Commerce business owners a bigger budget to invest in new software programs and website development to take their online business to the next level.
Some of the leading American e-Commerce platforms by monthly traffic include Amazon, eBay, Walmart, Etsy, Home Depot, Target, Lowe’s, and Best Buy.
Canada is considered a great place to start an online business as it offers an efficient tax structure, making it easier for businesses to become more profitable.
Due to Canada’s increasingly digital population, the country has become a profitable market for those looking to set up an e-Commerce business.
In 2021, there were approximately more than 27 million eCommerce users in Canada, making up almost 72.5% of the Canadian population.
This percentage is expected to grow to 77.6% in 2025.
These figures highlight the number of profitable opportunities there are within the Canadian e-Commerce market, which is currently dominated by electronic and media products.
The biggest e-Commerce platforms in Canada include Amazon CA, Walmart Ca, and Costco CA, which generate a combined revenue of US$ 1.6 billion and control 40% of the online market.
8. United Kingdom
The United Kingdom is considered one of the top three e-commerce markets globally.
Its annual sales reach $99 billion, which is nearly 14.5% of the total e-Commerce global retail sales.
Popular e-Commerce businesses include Argos and Amazon UK, where the leading product categories range from travel, fashion, sporting goods, and household items.
Moreover, the company incorporation process is also extremely affordable, easy, and convenient compared to other countries.
Incorporating an e-commerce business is particularly suitable for non-residents who do not carry out their business activities in the UK as they benefit from the favorable tax system.
Regardless of the size of your e-Commerce business, the UK is still an attractive option.
There are multiple e-Commerce platforms where small e-Commerce businesses have become extremely popular.
These include Amazon Marketplace, Depop, eBay, and Not On The High Street.
The UNCTAD’s Business to Consumer (B2C) E-commerce Index 2020 has reported that Switzerland has replaced the Netherlands and has secured the highest place amongst 152 countries in their readiness to engage in online commerce.
This is attributable to 97% of the Swiss population using the internet in 2019, making Switzerland the only non-European economy amongst the countries with the highest internet usage.
The E-Commerce Report Switzerland 2020 further highlights that the country is experiencing a strong internet shopping trend as nearly 10 billion Swiss francs were spent online in 2019.
The study anticipates further growth in the years to come.
As the 21st largest e-Commerce market by size and a country quite well-known for its high internet penetration, the revenue generated from the e-commerce market is projected to reach nearly USS 11.6 million in 2021 and is experiencing an annual growth rate of 6.85%.
Germany is another top contender within the e-Commerce market, especially within Europe.
The country offers competitive shipping options that contribute towards business growth and development.
Annual online sales in Germany are estimated at $73 billion, making up 8.4% of the global e-commerce retail sales.
The country is also experiencing a 5.4% growth rate which is skyrocketing its projected revenue.
The leading products within the German e-Commerce market include fashion, electronics, and media.
The global e-Commerce market is a testament to the increase in business innovation, technological advancement, and increased dependence on technology to carry on our day-to-day activities.
This provides a major opportunity for those looking to start an online business as the potential for profit and growth is huge.