Requirement to keep new Significant Controllers Register
Under the Amendment Ordinance, all Hong Kong companies (other than companies listed in Hong Kong) (“HK Co”) are required to identify who their “significant controllers” are (“Significant Controller”), and keep a Significant Controllers Register (“SCR”) containing their details accordingly.
Hong Kong incorporated subsidiaries of a listed company will also be required to comply with such requirement.
Who is a Significant Controller
In short, this includes persons who hold, directly or indirectly, more than 25% of the issued shares of the HK Co, or otherwise has the right to exercise or actually exercises significant influence or control over the HK Co (e.g. ability to appoint/remove a majority of the board of directors).
What you need to do
The HK Co must send a notice within 7 days after the commencement date of the Amendment Ordinance (i.e. no later than Thursday 8 March 2018) to persons whom the HK Co knows, or reasonably believes, to be a Significant Controller to confirm the Significant Controller’s details.
You need to take reasonable steps to identify the Significant Controller(s). This may include:
a. reviewing register of members;
b. reviewing articles of association;
c. reviewing shareholders agreements or other agreements; and
d. 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
You also need to nominate at least one person to act as the HK Co’s representative (the “Designated Representative”) to upkeep the SCR and provide assistance relating to the HK Co’s SCR to a law enforcement officer who demands access to the SCR. A Designated Representative must be either a shareholder, a director or an employee of the HK Co who is a natural person resident in Hong Kong or an accounting professional, a legal professional or a person licenced to carry on business as trust or company service provider
Given the Amendment Ordinance will take effect in about a month’s time, you are recommended to take steps to ascertain who you should be sending notices to such that you will be in a position to send out the notice by 8 March 2018 referred to above.
We can help you
For further information on what is required (e.g. what information to include in such register), we attach the following materials from the Companies Registry website for your reference.
If you have any questions or require any assistance to create such register, please do not hesitate to contact us.
FAQ
Please refer to:
cr.gov.hk
Guideline on the Keeping of Significant Controllers Registers by Companies
Companies Registry External Circular No. 2 / 2018
Client Alert 2018-032
