Hong Kong regulations have made it compulsory since March 2018 for all companies to create and maintain such Significant Controllers Register (also known as SCR).
So what in the world is it?
The SCR is a document listing each significant controller of a company.
That is any person directly or indirectly holding 25% or more of shares or voting rights in a company.
When we first informed our clients of the necessity to put in place this SCR, many did not understand and responded that they already had a Register of Members or Register of Shareholders serving the same purpose.
But the Significant Controllers Registers and Register of Members or Shareholders are different things.
Well, the Significant Controllers Registers focuses on direct but also indirect control of the company, irrespectively of who are its direct shareholders.
Let’s take the example of Company A.
Company A is owned by Company B.
Company B is owned by Mr. Y.
The shareholder of Company A is Company B, but Mr. Y is a significant controller.
So, Mr. Y will not appear in the Register of Members but will be included as a significant controller in the SCR.
The Significant Controllers Register serves a noble cause: mainly combating money laundering and, terrorist financing by making sure that authorities can easily know who are the significant controllers of a company.
The creation of the SCR is not proper for Hong Kong. Many jurisdictions now impose the creation and the maintenance of similar registers.
Only applicable authorities may have access to the SCR of a Hong Kong company. This means that your competitors or the public, in general, cannot access it.
Let’s first look at the specific obligations of any Hong Kong company:
Now, what are the risks faced by your company if it does not have a Significant Controllers Register?
A potential fine of HKD 25,000 plus a daily fine of HKD 700 until the problem is fixed.
So what should you do if your Hong Kong company has not yet created a Hong Kong SCR?
If you need assistance to create your HK SCR, please feel free to contact us. We will send you a Significant Controllers Register template free of charge.
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