Significant change of Company Law in Hong Kong| Conpak CPA Limited
Significant Change of Company Law in Hong Kong

In order to reinforce supervisory system of combating money laundering and the financing of terrorists in Hong Kong, the companies (Amendment) Ordinance 2018 passed by the Legislative Council of the Hong Kong Special Administrative Region, stipulated that: A company incorporated in Hong Kong to obtain and maintain up-to-date beneficial ownership information, by way of keeping a Significant Controllers Register (“SCR”), for inspection by law enforcement officers upon demand. The interpretation of Keeping of Significant Controllers Registers as follow:

The Significant Controller of companies including registrable person (a natural person who has a great control over the company) and registrable legal entity (such as has a great control over the company, a company which as the shareholder of the company), a person has significant control over an applicable company as defined if one or more of the following conditions are met:

  • The person holds, directly or indirectly, more than 25% of the issued shares in the company or, if the company does not have a share capital, the person holds, directly or indirectly, a right to share in more than 25% of the capital or profits of the company.
  • The person holds, directly or indirectly, more than 25% of the voting rights of the company.
  • The person holds, directly or indirectly, the right to appoint or remove a majority of the board of directors of the company.
  • The person has the right to exercise, or actually exercises, significant influence or control over the company.
  • The person has the right to exercise, or actually exercises, significant influence or control over the activities of a trust or a firm that is not a legal person, but whose trustees or members satisfy any of the first four conditions (in their capacity as such) in relation to the company.

The company need to confirm its Significant Controllers by reviewing the company’s register of members, articles of association, shareholder agreements or other agreements and issuing notice(s) to related person. The company need to indicate in the Significant Controller register if it has no Significant Controller.

If a company fails to comply with the requirement of keeping a SCR, the company, and each of its responsible persons, will be liable on conviction to a fine up to $25,000 and a daily fine of $700, in addition, any person who knowingly or recklessly makes misleading, deceptive or false statements, will be liable on conviction to a fine up to $100,000 to $300,000 and 6 month to 2 years’ imprisonment. So we suggest the investor who had a company or will register the company in Hong Kong, keep the register in time to avoid related risks. If you want to inquire more information relate to the significant controllers registers, please contact with our professional consultant, we will provide you the consultation service for free.

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