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According to the Companies (Amendment) Ordinance 2018, a Register of Significant Controllers (“SCR”) has to be maintained in Hong Kong (either in the registered office or at a designated location of which a Form NR2 has to be filed with the Companies Registry within 15 days after the SCR is first kept at that place) with effective from 1 March 2018.
What are the new requirements on the keeping of Significant Controllers Register 1. Under the Companies (Amendment) Ordinance 2018, a company incorporated in Hong Kong is required : i. to identify persons who have significant control over the company (“significant controllers”). ii. to maintain a significant controllers register (“SCR”) to be accessible by law enforcement officers.
2. Major obligations of a company include: i. Identifying significant controllers. ii. Giving notices to significant controllers & others. iii. Entering particulars in the Register. iv. Updating information in the Register. v. Allowing inspection by law enforcement officer.
Failure to comply with the obligations is a criminal offence. The company and every responsible person of the company are liable to a fine at level 4 (i.e. HK$25,000). Where applicable, there is a further daily fine of HK$700.
Who is a Significant Controller of a company? A significant controller is the person/entity that has significant control over the company which includes::
1. A registrable person who is a natural person. 2. A registrable legal entity which is a shareholder of the company.
A person has significant control over a company if one or more of the following 5 conditions are met –
1. 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. 2. The person holds, directly or indirectly, more than 25% of the voting rights of the company. 3. The person holds, directly or indirectly, the right to appoint or remove a majority of the board of directors of the company. 4. The person has the right to exercise, or actually exercises, significant influence or control over the company. 5. 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.
What are the contents of significant controllers register? A company must keep its SCR in the English or Chinese language. The SCR of a company must contain, among others,
1. The required particulars of every significant controller of the company. 2. The particulars of any registrable change with respect to each significant controller of the company. 3. The name and contact details of at least one designated representative to provide assistance relating to the company's SCR to a law enforcement officer. A company’s designated representative must be either a shareholder, director or an employee of the company who is a natural person resident in Hong Kong or am accounting professional, a legal professional or a person licensed to carry on a business as trust or company service provider.
What should a company do to identify significant controllers? A company is required to take reasonable steps to identity its significant controllers. The steps may include reviewing the company’s register of members, articles of association, shareholder agreements or other agreements and issuing notice(s) to any person who is believed to be the significant controller and any person who is believed to know the identity of the significant controller.
However, a company is not required to send the notices if the company has already been informed of the person's status as being its significant controller and all the required particulars have been provided to the company by the person or with the person's knowledge.
When does a company need to enter the particulars of registrable person/legal entity into the significant controllers register? 1. For a registrable person: within 7 days after the required particulars have all been confirmed by the registrable person. 2. For a registrable legal entity: within 7 days after each particular comes to the notice of the company.
What form should a company deliver to report the location of significant controllers register? Unless the SCR is kept at the registered office, a company must notify the Registrar of the place where the SCR is kept or any change thereafter in specified Form NR2 within 15 days after the SCR is first kept at that place or the change.
However, an existing company is not required to give notification to the Registrar if the SCR is kept at the same place where the company's register of members is kept.
Please ensure you comply with the legislation of SCR.
Need Assistance INTERSHORES can be your nominated person the Register of Significant Controllers. Please do not hesitate to contact us at info@intershores.hk or by whasapp at (852) 6499 4686.
Whatsapp : (852) 6499 4686 Phone : (852) 2186 6936 Email : info@intershores.hk
Disclaimer: Whilst reasonable care has been taken in provision of information above, it does not constitute legal or other professional advice. INTERSHORES does not accept any responsibility, legal or otherwise, for any error omission and accepts no responsibility for any financial or other loss or damage that may result from its use. In particular, readers are advised to take appropriate professional advice before committing themselves to any involvement in jurisdictions, vehicles or practice. |
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