Appointing a company secretary is a legal necessity for incorporating a business in Hong Kong. Without one, a foreign business cannot register and operate in the territory.
The company secretary can be an individual (a Hong Kong resident) or a corporation (a licensed Hong Kong Trust and Corporate Service Provider with a Hong Kong business address).
Secretaries work closely with shareholders, directors, and governmental agencies to stay informed and compliant.
Air Corporate offers company secretarial services to ensure compliance and handle administrative tasks, allowing business owners to focus on running their businesses.
Individuals and organizations that want to establish a company in Hong Kong must first meet several conditions, one of which is the appointment of a company secretary. This guide explains why you need a company secretary in Hong Kong and the responsibilities that come with the role.
What Is a Company Secretary in Hong Kong?
The Company Secretary is a legally mandated officer under the Hong Kong Companies Ordinance. They are responsible for ensuring a company adheres to all statutory and regulatory requirements.
However, viewing the Company Secretary as simply a compliance officer is a limited perspective.
They are also strategic advisors, governance experts, and key communicators, acting as a crucial link between the company, its board of directors, shareholders, and regulatory bodies.
What Does a Company Secretary in Hong Kong Do?
The Hong Kong Companies Ordinance outlines the legal requirement for a Company Secretary, but the specifics of their role are often detailed in the company's articles of association. In practice, a Company Secretary in Hong Kong is expected to perform a wide range of duties, including:
Ensuring Regulatory Compliance
- Inland Revenue Department (IRD) Registration: Registering the company with the IRD after incorporation and maintaining accurate records.
- Annual Tax Return Filing: Preparing and filing annual tax returns to avoid penalties.
- Compliance with KYC/AML Regulations: Implementing and maintaining Know Your Customer (KYC) and Anti-Money Laundering (AML) procedures.
Maintaining Statutory Records
- Custody of Statutory Documents: Securely maintaining all company statutory books and documents, providing access when required.
- Updating Company Records: Recording any changes to company information, such as changes in directors, shareholders, or shareholding.
Managing Corporate Governance
- Scheduling and Attending Meetings: Organizing and attending board and shareholder meetings, preparing agendas, and ensuring compliance with meeting procedures.
- Preparing Meeting Minutes: Accurately documenting meeting discussions and decisions.
Liaising with Stakeholders
- Communicating with Government Agencies: Acting as the primary point of contact with the Companies Registry, IRD, and other relevant agencies.
- Collaborating with Shareholders and Directors: Ensuring effective communication and collaboration between all stakeholders.
Post-Incorporation Filings
Preparing and filing necessary documents for changes to the company, such as changes in company name, registered address, or directors.
Staying compliant with laws and regulations is essential to avoid fines, legal action, and reputational damage. Regularly review requirements and ensure proper documentation to protect your business.
Why Is a Company Secretary Essential?
A skilled Company Secretary is more than just a legal necessity—they play a crucial role in a company’s success. They help ensure compliance with laws and regulations, reducing the risk of legal penalties and protecting the company’s reputation.
They promote ethical decision-making, transparency, and accountability, which can boost investor confidence. A Company Secretary also improves efficiency by managing administrative tasks, allowing internal teams to focus on core business activities.
Their presence enhances credibility, demonstrating a commitment to good governance and building trust with investors, customers, and employees. Beyond compliance, they provide strategic guidance to the board, offering insights that help navigate complex business challenges and drive informed decision-making.
Who Can Be a Company Secretary?
The requirements for who can be a Company Secretary are specific under the Companies Ordinance:
- Individuals: A natural person who is a Hong Kong resident.
- Corporations: A body corporate that has its registered office or a place of business in Hong Kong and holds a Trust or Company Service Provider (TCSP) license.
Key Requirements of a Company Secretary
A Company Secretary must be a Hong Kong resident. "Hong Kong resident" typically refers to someone holding a Hong Kong Identity Card (HKID) and ordinarily residing in Hong Kong. A valid basis to reside in Hong Kong, such as a work visa or permanent residency, is necessary.
The individual or the corporate representative should possess the necessary knowledge and experience to perform the duties of a Company Secretary. Membership in a relevant professional body, such as The Hong Kong Institute of Chartered Secretaries (HKICS), is often seen as an indicator of competence.
A sole director and company auditor cannot be the company secretary.
Where to Find a Company Secretary?
Finding the right company secretary depends on your business needs. Some companies work with corporate secretarial firms that specialize in compliance and filings, ensuring all legal requirements are met.
Others choose accounting firms that offer secretarial services alongside financial management, providing a more integrated approach. Online platforms also make it easier to connect with qualified professionals without the hassle of a long search.
When it comes to appointing a company secretary, businesses have a few options. Larger companies with complex operations often hire an in-house secretary to provide full-time support and oversight.
Smaller businesses or those looking for a more flexible solution may choose to outsource the role to a corporate secretarial firm, which helps reduce costs while maintaining compliance.
Choosing the Right Secretary
When selecting a Company Secretary, conduct thorough due diligence:
- Verify Credentials: Check professional qualifications, memberships (e.g., HKICS), and TCSP license (if applicable).
- Assess Experience: Evaluate experience in company secretarial work, particularly within your industry.
- Check References: Contact previous clients or employers to assess performance and reliability. Here are examples of questions to ask:
-Were deadlines consistently met?
-How responsive were they to inquiries?
-Were there any compliance issues during their tenure?
- Inquire About Compliance Knowledge: Ensure a thorough understanding of Hong Kong's Companies Ordinance and relevant regulations.
- Investigate Disciplinary History: Check for any disciplinary actions by professional bodies or regulatory authorities.
Changing Company Secretaries
Yes, a company secretary can be changed in Hong Kong. The process generally involves:
- The current company secretary can resign from their position or the company's board of directors must pass a resolution to remove the existing Company Secretary and appoint a new one.
- The Companies Registry must be notified of the change within 15 days of the appointment.
- The outgoing Company Secretary must transfer all company records to the new appointee.
Conclusion
When establishing a foreign company in Hong Kong, you are required by law to appoint the right company secretary.
The person or organization you choose for this position guarantees that your company follows Hong Kong corporate and tax requirements. They also play an important role in the administration, direction, and corporate governance of your company's Hong Kong activities.
Need a Company Secretary in Hong Kong?
Appoint Air Corporate as your company secretary, even if you are incorporated elsewhere. We'll ensure compliance and handle administrative tasks so you can focus on running your business.
Let Air Corporate be your trusted partner in Hong Kong.
FAQs
Yes, every Hong Kong-registered company must appoint a Company Secretary as required by the Companies Ordinance. Without one, a company cannot be incorporated or remain compliant with local regulations.
A sole director cannot serve as the Company Secretary. However, if the company has multiple directors, one of them may take on this role, provided they meet the eligibility requirements.
If an individual is appointed as the Company Secretary, they must be a Hong Kong resident. If a corporation is appointed, it must be a licensed Trust or Company Service Provider (TCSP) with a registered office in Hong Kong.
Failing to appoint a Company Secretary can result in fines, penalties, and non-compliance issues with the Companies Registry. This may also affect the company's ability to conduct business legally in Hong Kong.
