Requirement For Offshore Company Registration In Hong Kong
The Team
Founding members are the ones who are the first members of the company, especially for overseas investors for their offshore Hong Kong company incorporation Service. Their details are meant to be mentioned in the articles of association and incorporation form and they become members as soon as the company comes into existence. After their appointment as members, share certificates should be issued to them.
Under company ordinance 2004, all Hong Kong company Incorporation services were required to have a minimum of two members and this ordinance was misused in some way and thus “one-man company” concept was not getting much reality. Common practices showed that in these circumstances, real members hold the 99% of shares while other 1% is given to other member who holds the shares as nominee or trustee for the first member. This matter then went to the courts, and the courts accepted that statutory requirement of minimum members is symbolic and just for legalisation of their businesses, nominee has no active part in the daily Hong Kong company incorporation services, businesses of the company and their status is just of symbolic nature. However, over the time and this realisation of statutory requirement resulted in abolishment of this Section 4 of Cap.32. Finally, in 2004, Hong Kong legislation allowed operations of “One Man Company” and amendment now being known as Section 67 of Cap.622.Now for such companies to operate, register of members must have statement of fact under Section 629 of Cap.622. Referring to the case of Randhawa v Turpin [2017] BCC 406 (Eng CA), it is found that company with more than one registered members could not be converted to a single member just because a member dies or a corporate member is dissolved.
Subjected to certain exceptions, a body corporate or overseas businessmen before they go offshore company registration in Hong Kong cannot be a member of a company of which the body corporate is a subsidiary except this condition, A body corporate can be a member of a company. This can best be explained with the example that: “if A holds 100% shares of B, then B can not be a member of A”. Under Section 13(1) Cap.622: A company X is a holding company of another company Y only if, X controls the board of directors of Y, Controls more than half voting power of Y or holds more than half of issued shares of Y’s capital.
After incorporation, change of members be only allowed if new members be issued new shares or if transfer is to be carried out, then transmission of shares from existing member to the new member be ensured.
Company’s Director
Companies Ordinance lays down certain requirements for directorship. Cap.622 Section 454 says that private companies must have at least one director. Cap.622 section 453 says that Public companies and Companies limited by guarantee must have at least two directors. There is no maximum limit for the number of directors unless mentioned in the articles. The person named as director in incorporation form shall be made first director company as soon as company comes into existence however with time and while continuation of business, company can remove directors or appoint new.
Company’s Secretary
Under Cap.622 section 474, every company must have a company secretary and this the person who is the chief administrator of the company, apart from the administrative matters, secretary’s functions include:
- Preparations for board and shareholder meetings.
- Dealing with Stock Exchange norms
- Maintaining registers with ordinance, filing returns and other documents with registrar.
Instead of having a one secretary, there is a possibility of having joint secretaries. One possibility is Partnership firm where under Cap,622 section 474(3), sec 650 all the partners in the firm would act as joint secretaries of the company. Being the resident of Hong Kong is mandatory for company’s secretary and if body corporate is made secretary then there is the condition of having registered office or place of business of the body corporate be in Hong Kong.
Director can also be appointed as Company’s secretary under the Cap.622 Section 475(1), provided company is not a private company where there is only one director. Under Cap.622 Section 475(3), In such company body corporate can also not be the secretary, whose sole director is the sole director of the private company.
The articles will lay down the circumstances under which Company’s secretary could be removed and new one be appointed, such as, Model articles gives board of directors authority to appoint or remove any company secretary.
Office Locality
Under section 658 Cap.622 it is mandatory for the company to have office located in Hong Kong. As per Cap.622 section 827 all correspondence and documents will be sent to the registered office location and generally company information is kept at the registered office
After inception of company, the location mentioned in Incorporation form is considered as Registered Office of the said company and if any change in locality is served, then this must be notified to the Registrar within 15 days of this change in address.
Legally and as per the acceptance by the courts, it is admitted and accepted that service of documents from the registered office be deem authentic and any service other than this locality would not be considered as authentic, if any change occurs then this must be taken into the notice of Registrar otherwise the Registered office as mentioned in the Incorporation form be treated official.