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Everything About Share Certificates of a Hong Kong Company
September 25, 2020 by Mark Wong
Any shareholder receives a share certificate at the time of its investment in a company. This document is absolutely crucial as it evidences the shareholders’ ownership and participation in a company. If you hold shares in a Hong Kong company, this guide explains everything you must know about your share certificate.
A share certificate is a document issued by a company to its shareholders to evidence their ownership in that company.
A company may have one or more share certificates depending on the number of shareholders.
If you own shares of a company in Hong Kong, you should receive a share certificate with all details concerning your shares.
A share certificate normally includes the following information:
A share certificate may include various other information.
For example, if a shareholder is restricted from selling its shares (based on the provisions of a Shareholders Agreement), it is generally a good idea to include a reference to this restriction on the share certificate.
If a shareholder holds different classes of shares of a company (for example ordinary and preference shares), it is recommended to issue separate share certificates for each class. In the context of preference shares it is also advised to include a brief description of the rights attached to such shares on the share certificate.
There is no standard or prescribed format. Please refer to the picture below for a sample of share certificate issued by a Hong Kong company.
Share certificates issued by company in other jurisdictions (Singapore, BVI, Delaware) usually follow the same format.
A share certificate is usually prepared by the company secretary.
The company secretary normally also takes care of preparing all documents leading to the issuance of new share certificates (share allotment or share transfer documents).
Upon issuance, a share certificate shall be signed by at least two directors. If the company has a sole director, then only one signature is required.
There are various occasions in which a Hong Kong company may issue share certificates to its shareholders:
It is strongly advised to keep the share certificates of a company at a safe place.
To reduce the risks of loss, we recommend that your company secretary keeps such share certificates at its office together with the company’s statutory records. You may also ask your company secretary to provide you with a certified true copy of such share certificates.
The register of members of a Hong Kong company is a single document (usually a table) listing all shareholders of a company, their respective number of shares, the date on which they became or ceased to be shareholders of the company. This document provides a comprehensive overview of a company’s past and current shareholding structure.
On the contrary a share certificate only evidences the ownership by a shareholder of a certain number of shares at a certain point in time.
A certificate of incumbency is a document issued by a regulated third party (lawyer, public notary) and confirming certain information about a company such as its shareholders, ultimate beneficial owners, directors. It is normally required when a company applies for the opening of a bank account, a public subsidy or a loan.
By contrast, a share certificate is issued by a company itself rather than by an independent third party.
When a person ceased to be a shareholder of a company, it shall return its share certificate to such company. An officer of the company (usually its company secretary) shall take care of cancelling such share certificate, usually by affixing a “Cancelled” stamp on the certificate. This officer will then update the company’s register of members to reflect the date on which such shareholder ceased own shares of the company.
You have not yet registered your Hong Kong company or opened your business account? Check our step-by-step guide to registering a company in Hong Kong in 2020.
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