After successfully incorporating your company in Hong Kong and setting up a bank account, the next crucial step is to ensure proper legal maintenance and compliance.
In this third installment of our comprehensive guide, we'll delve into the vital role of the corporate secretary, legal obligations, and the importance of adhering to corporate governance standards in Hong Kong.
The Importance of Legal Maintenance
While the initial excitement of starting a new business venture is understandable, it's essential to recognize that company incorporation is just the beginning of your compliance journey. Neglecting legal maintenance and corporate governance requirements can have severe consequences, including penalties, legal issues, and potential business disruptions.
The Role of the Corporate Secretary
In Hong Kong, the corporate secretary plays a pivotal role in ensuring your company's legal compliance. Contrary to the perception of an administrative assistant, the corporate secretary holds a paralegal function and is responsible for maintaining your company's legal and regulatory obligations.
The primary responsibilities of a corporate secretary include:
Handling changes in directors, share allotments, share transfers, and registered addresses.
Organizing annual general meetings (AGMs) and extraordinary general meetings (EGMs).
Filing the annual return with the Companies Registry (CR).
Maintaining the Significant Controllers Register (SCR).
Facilitating the renewal of your business registration (BR) and registered address.
Liaising with the Companies Registry on your behalf.
It's crucial to engage the services of a licensed Trust or Company Service Provider (TCSP) for your corporate secretarial needs, as mandated by Hong Kong's regulations since 2018. Switch your company secretary to ATHENASIA for free, schedule a free consultation to learn more.
Annual Return and Business Registration Renewal
Every year, your company is required to file an annual return with the Companies Registry. This document outlines any changes related to the company's governance, such as changes in directors, share capital, company secretary, or registered address. The filing fee for the annual return is HK$105, and it's essential to submit it on time to avoid penalties.
Additionally, your business registration (BR) needs to be renewed annually, with a fee of HK$2,150. Failure to renew the BR can result in hefty fines and legal consequences.
Significant Controllers Register (SCR)
The Significant Controllers Register (SCR) is a crucial document that identifies the individuals who directly or indirectly control your company. While not publicly accessible, this register must be maintained and made available for official inspections upon request.
Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) Compliance
Hong Kong's AML and CTF regulations require annual background checks on all shareholders and directors to ensure they are not listed as sanctioned individuals or politically exposed persons (PEPs). If you are a PEP, it's essential to disclose this information to your corporate secretary to facilitate appropriate compliance measures. Transparency is key to maintaining a clean record and avoiding legal complications.
Conclusion:
Maintaining legal compliance and adhering to corporate governance standards is not only a regulatory requirement but also a fundamental aspect of operating a successful business in Hong Kong. By engaging the services of a reputable firm like ATHENASIA Consulting and a licensed corporate secretary, you can ensure that your company remains compliant, minimizing legal risks and fostering a professional business environment.
In the next part of this series, we'll explore the intricacies of accounting, auditing, and tax representation in Hong Kong, providing valuable insights to help you navigate these critical aspects of running your business effectively.
