On a personal level, a company director is mandated to disclose his/her holding interest in regard to the shares of the company and any other associated company, according to the Securities and Futures Ordinance of Hong Kong. This ensures transparency in all the listed companies hence providing investors with significant information for making informed decisions. Failure to make this disclosure is a criminal offense in Hong Kong which attracts a fine of HK$100,000 and a two-year imprisonment verdict.
Complying with corporate governance stipulations gives your company a positive outlook from investors. As a company director, you should ensure that your company complies with the corporate governance regulations, and should some areas be not complied with, you are mandated to report this in the annual reports.
Important Attributes of a Company Director
- A company director should be academically qualified and be familiar with the company laws and regulations of a Hong Kong company.
- A director should have relevant experience in directing a Hong Kong company.
- A director in a Hong Kong company must also possess a service provider’s from the Trust or Company Service Provider licensing body of Hong Kong.
- He/she should possess integrity and accountability skills.
- A company director should possess people skills such as being a good communicator.
- A company director should also possess technical skills relevant to that position.
- Honesty and trustworthiness must be part of a director’s character.
Hong Kong Shareholders
A Hong Kong shareholder can be either a natural person or an institution as long as they have at least one share in that company and be 18 years and above. They are not just there to be seen but they have rights and roles as below:
Rights of a Hong Kong shareholder
The Hong Kong Company Ordinance protects the rights of shareholders from being altered except under a special resolution. In the same light shares of one class cannot be converted to another class of shares unless under a special resolution and 100% consent of all shareholders. In the case of a special resolution to these two elements of shareholders’ right, a copy of the notice to undertake a special resolution plus a certified copy of the resolution must be presented to the offices of the Company Ordinances.
- Because you own a share, you have the right to receive dividends and buy new shares.
- During the dissolving/deregistration of that company, you have the right to receive the capital distribution as a shareholder.
- A shareholder has the right to appoint commissioners.
- As a shareholder, you have a right to vote on the company’s decision making and a right to sue the company for any wrongful undertakings.
- A Hong Kong shareholder has a right to receive audited accounts reports and director’s report.
- Shareholders have a right to hold their meetings in any geographical location of their choosing.
- Shareholder monitors and approves the financial statements of the company.
- A shareholder is responsible for the acquisition or dismissal of directors and he/she also responsibles in deciding on the extent of authority that directors will hold.
- He/she decides the remuneration number of directors and makes decisions that the directors cannot make.
- A shareholder attends general meetings of the company on an annual basis and votes to decision making during the Annual General Meeting.
- A shareholder’s responsibility is to examine financial records and audited accounts of the company and monitor the performance of the company.
In regard to the question of whether a company director or shareholder can be a company director, the answer will not be a straight no or yes. This is because it will depend on whether the shareholder or director is the sole shareholder or sole director of that company. If she/he is a sole director/shareholder, he/she cannot undertake the position of a company director. A shareholder on the other hand can be both a shareholder and a director of a company.