Just as is the case in any other country of the world, company secretaries in Hong Kong play very important roles. Some may be hired by the company itself while others may have been selected by a corporate secretarial firm, but ultimately, no company could possibly function without one.
Definition of a Company Secretary
A corporate secretary is a person who holds a senior position in a certain company. Company secretaries exist in private sector and public sector companies alike. The company secretary is answerable for the efficient administration of an organization. Among the company secretary’s most important task are those mainly related to ensuring compliance with statutory and regulatory demands. A company secretary also ensures that decisions of the board of directors are implemented. Despite the name of the position, a company secretary’s role is neither clerical nor secretarial. The company secretary ensures that an organization complies with relevant legislation and regulation. The company secretary also ensures that the board members remain informed of their legal responsibilities. Company secretaries serve as the representative of the company as stated on legal documents. It is the responsibility of a company secretary to ensure that the company and its directors operate within the law. The company secretary also has the responsibilities of registering and communicating with shareholders, ensuring that dividends are paid, maintaining company records such as lists of directors and shareholders, and managing annual accounts.
In many countries including Hong Kong, all private companies are legally obligated to appoint a person to serve as the company secretary. The person who is selected for this crucial position is also usually a senior member of the company’s board of directors.
Roles and Responsibilities of a Company Secretary
Company secretaries in companies of all sectors have many responsibilities including managing the governance structures of the company, overseeing corporate conduct within an organization’s regulatory environment, attending and being active during important meetings, ensuring compliance with all necessary requirements, training certain non-executives and trustees, contacting regulatory and other external bodies, reporting to shareholders and trustees, management of employee benefits such as pensions and employee share schemes, handling all of the company’s matters related to insurance, creating and negotiating contracts, and sometimes even interpreting financial accounts. Company secretaries are the primary source of advice on the conduct of business and this can span everything from legal advice on conflicts of interest, through accounting advice on financial reports, to the development of strategy and corporate planning.
Importance of Company Secretaries in Hong Kong
According to the Companies Ordinance in Hong Kong, anyone who decides to establish a business organization must fulfill the primary requirement is selecting a company secretary. It does not matter whether the Firm in question is a public or privately owned firm – every firm requires one.
There are several important reasons as to why there is a need for a company secretary in Hong Kong companies. These reasons will be discussed in the following paragraphs.
When members of the Hong Kong administration want to reach the company, the secretary will serve as a connector between the government and the company. Whether it is for legal matters, clarification, or other complex issues, the secretary bears the majority of the responsibilities. All the statutory books of the company are kept by the company secretary, The company secretary is also in charge of maintaining and updating the company’s statutory books, which include the names and personal details of directors and shareholders.
The company secretary is also responsible for overseeing the production and distribution of the company accounts and reports to shareholders and members of the company. Even if the company decides to terminate operations, it is the company secretary who oversees the entire process of liquidation.
Compliance with Hong Kong Laws
A company without a qualified company secretary in Hong Kong will find impossible to be listed on the Hong Kong stock exchange. The Hong Kong administration made this requirement in law to help companies operate smoothly and legally, thus helping the companies of Hong Kong avoid conflicts.
Company secretaries are also responsible for ensuring the company’s compliance with other legal regulations of Hong Kong. It is, therefore, essential to pick a person who is knowledgeable about Hong Kong company law and its application in Hong Kong and China.
Company’s Tax Obligations
The benefits of having a competent company secretary are not limited to only complying with the laws of Hong Kong. Company secretaries also have other essential responsibilities that extend to decision-making, governance of the company, and the company’s administrative process.
One of the pertinent matters that the Hong Kong administration emphasizes is that of tax compliance. It is the responsibility of the person selected as the company secretary to ensure that the company is compliant with Hong Kong’s tax laws at all times. To comply with the tax obligations of Hong Kong, the company secretary has to register the company with the Inland Revenue Derpartment (IRD) so that its details can be analyzed by different government departments.
If a business organization requires additional authorization from the Hong Kong government, the company secretary has to facilitate compliance for smooth operation of the company. At the end of every financial year, the company secretary will also help to ensure that the tax returns are done on time and correctly.
Therefore, it can clearly be said that having a qualified company secretary has only positive outcomes for a business owner in Hong Kong. Those who do not have one might not be able to operate the company smoothly in Hong Kong. Thus, those who would like seamless management of a Hong Kong business ought to hire a competent and qualified company secretary. Some may even choose to utilize the services of an agency who will select a person to serve as the company secretary. Such agencies will ensure that the company will always be compliant with Hong Kong’s existing laws.
How Corporate Secretarial Firms Work with Hong Kong Companies
Corporate secretarial firms serve companies across Hong Kong in many aspects. Some of these aspects pertain to company establishment, annual maintenance filings, and cooperation with the Hong Kong Companies Registry and Business Registration; this may even include the processes of deregistration and winding up. Some of the services provided by corporate secretarial firms to Hong Kong companies include the following: preparing and amending Articles of Association according to Hong Kong’s laws, making filings with the Companies Registry, serving as a named company secretary of a Hong Kong company in the corporate secretarial firm’s name, preparing annual returns and filing them with the Companies Registry, preparing documents which are highly relevant to the annual general meeting (AGM) of the company, managing and updating the statutory books and records of the company, preparing documents which are related to share transfers and filings and to be sent to the Stamp Office for stamping, and preparing documents to be sent to the Companies Registry if they have any relevance to any of the following matters: change of director, change of company secretary, change of registered office address, change of name, share allotment, or consolidation or subdivision of share capital.
Tasks to Be Performed by a Corporate Secretarial Firm
It can sometimes be difficult to discover a corporate secretarial firm which fulfills all of a company’s needs in the best ways possible. However, the best way to judge the quality of a corporate secretarial firm is by taking into consideration the range of tasks it is able to complete on behalf of the company. A high-quality corporate secretarial firm should be able to complete the following tasks:
- Consultancy on company incorporation in the country and types of business entity which exist there
- Preparation of Articles of Association and any other legal documents needed for registration of the company
- Preparation and filing of registration application to the relevant authorities of the country
- Registration with the financial and tax authorities of the country
- Registration for any business license which might be needed by the company
- Registration of the company’s corporate bank account
- Information on any legal compliance changes related to the company
- Representation of the company in front of the local authorities
Company Secretaries and Corporate Secretarial Firms in Hong Kong FAQs
As has just been mentioned, neither a director nor a shareholder can serve as a company secretary in Hong Kong.
According to the Companies Ordinance in Hong Kong, neither a director nor a shareholder can serve as a company secretary. A company secretary who is not already part of the company has to be appointed.
Every company in Hong Kong is required to have a company secretary. The company secretary can either be hired through the company’s own search for one or by using the services of a corporate secretarial firm.