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All you need to know about a Company Secretary

By FastLane Team, April 25, 2019 (5 mins)

For all limited companies in Hong Kong, to comply with the Hong Kong Companies Ordinance, it is required that you have a physical location in Hong Kong, one director and one secretary. Thus, in this article, we will outline the importance and main duties of a company secretary.

 

TLDR: The role of a ​​Company Secretary (Com Sec) in a company is vital because of the significance of the duties they perform. The core duty involves communicating with the authorities on behalf of the company and ensuring compliance. There are other responsibilities a company secretary should perform such as; understanding the company’s processes and policies as well as being knowledgeable about the rules and regulations laid out within the jurisdiction. A Company secretary can be a person or a corporation. Seeking the guidance of a professional in this aspect can save time and reduce the risk of noncompliance.

 

What you will learn from this article:

1. What is a Company Secretary?

2. Why do you need a Company Secretary in Hong Kong?

3. Who can be appointed as a Company Secretary in Hong Kong?

4. The importance of a Company Secretary

5. Responsibilities of a Company Secretary

6. What Makes a Good Company Secretary?

7. Why should you use FastLane’s secretarial service?

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What is a Company Secretary?

When deciding to set up your business in Hong Kong, appointing a qualified company secretary is very crucial to a successfully run company. A company secretary is different from a clerical secretary and the position can either be occupied by an individual or a corporation. The company secretary oversees maintaining communication with the government and regulatory bodies (e.g., the Registrar of Companies, IRD, SFC, and the Stock Exchange of Hong Kong) in Hong Kong. This position holds a high rank in a Hong Kong Limited company because of the weight of the responsibilities associated with the role. The duties of a company secretary also includes interacting with the directors and shareholders of the company. They ensure compliance with laws and regulations in Hong Kong.

 

Why do you need a Company Secretary in Hong Kong?

Appointing a company secretary is part of the legal requirements for registering a company in Hong Kong.

The importance of appointing a professional company secretary is not limited to the above legal requirement alone. 

Generally, the company secretary acts as the bridge between the company and the Hong Kong authorities. 

Their core function includes:

  • Acting as your company’s compliance officer to ensure statutory filings with the Hong Kong government.
  • Performing the function of communication manager between the company and the Hong Kong companies registry.

 

Who can be appointed as a Company Secretary in Hong Kong?

An individual or a corporation can be appointed as a company secretary

  • If a company decides to appoint an individual as the secretary, the individual must be a resident in Hong Kong. 
  • If a corporate body is appointed instead, it must have a business address in Hong Kong, and must also be a licensed Hong Kong Trust and Corporate Service Provider (TCSP).  
  • If a Limited Hong Kong company has only one director, that director is not eligible to also act as the company secretary at the same time. 
  • Furthermore, if Company A is a private Hong Kong company and only has one director, then Company A cannot engage Company B to act as its company secretary if both companies share the same sole director.

The importance of a Company Secretary

As stated under s.474 of the Hong Kong Companies Ordinance, all Hong Kong companies are required to appoint a company secretary. As such, those looking to complete the Hong Kong company incorporation process cannot do so until a company secretary has been appointed. Company secretaries are responsible for ensuring statutory compliance with regulations through the provision of professional guidance and advice to their companies. This role also includes ensuring that all legal documents and filings are punctually submitted to avoid government penalties.

 

For those unfamiliar with Hong Kong’s laws and compliance processes, it is best to outsource the role of company secretary to avoid any potential fines or penalties associated with non-compliance. As a Hong Kong licensed Trust Corporate Service Provider (TCSP License No. TC000758), the FastLane Group is certified to assist you in all company secretary related services. From helping you with Hong Kong company incorporation to assisting you in your Annual Return Filing, the FastLane Group aims to create a one-stop solution for all your Hong Kong company secretary needs.

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Responsibilities of a Company Secretary

As mentioned above, the primary responsibility of the company secretary is to ensure their company remains compliant with all applicable laws and regulations. While the Hong Kong Companies Ordinance does not explicitly outline the specific job responsibilities a company secretary must fulfill, each company’s articles of association should include terms that detail what is expected of this position.

Hong Kong company secretaries typically must fulfill the following core responsibilities:

 

Coordinating the Preparation and Submission of Profit Tax Returns

Hong Kong’s tax system is very simple and straightforward, but also requires that the necessary information requested by the authorities be prepared and submitted on time.

A professional company secretary should ensure that all tax deadlines and obligations are adhered to. As the managers of the company can get carried away with the daily hustle and bustle in the business world, the company secretary should act as the timekeeper, reminding and ensuring that audit reports and financial statements are submitted as of when due.  

 

Assist in Preparation and Filing of the Annual Return

The filing of  Annual Returns and Profit tax returns are different. The Annual Return form (NAR1) is a form containing the basic information of all the shareholders and directors of a limited company in Hong Kong. The Annual Return form must be submitted to the Hong Kong Companies Registry on a yearly basis. This return details all particulars of the company and is to be signed by the company director, company secretary, or an authorized representative. 

Any delay in submitting the Annual Return to the companies registries can lead to penalties. Therefore, the company secretary must keep an eye on all deadlines and filing requirements. As the company secretary is responsible for handling all the mails from the government, they should make sure that communication with the company’s managers is made timely, to avoid delays in submissions. Listed below are the penalties for missing the deadline: 

HK$
NAR1 filing within 42 days after the company’s return date @, Government fee payable will be  105
Penalty for late submission for more than 42 days after but within 3 months after the company’s return date @ 870
Penalty for late submission for more than 3 months after but within 6 months after the company’s return date @ 1,740
Penalty for late submission for more than 6 months after but within 9 months after the company’s return date @ 2,610
Penalty for late submission for more than 9 months after the company’s return date @ 3,480
@ = the anniversary of the company’s date of incorporation

Notify and Update the Authorities on Changes in the Company

From time to time, the need may arise to update the particulars of the company. This may include updating the registered address of the company, appointing new directors, or updating the company’s shareholding structure. The Company secretary is the responsible officer to ensure that these statutory updates are executed timely and correctly. 

In addition, it is their responsibility to produce, publish and distribute the company’s accounts and reports. 

Upon any change to the company’s statutory books, company secretaries must notify authorities by submitting documents to the Hong Kong Companies Registry. 

 

Organize and Attending Board Meetings

All company meetings that involve the board of directors and shareholders of a Hong Kong company are to be organised by the company secretary. As Hong Kong companies must follow set procedures to ensure that any decisions made during these meetings are compliant with Hong Kong laws, it is imperative that the company secretary attend these meetings and prepare agendas and meeting minutes.

 

Assist in Share Issuance and Transfers

Hong Kong companies that engage in issuing or transferring their shares must follow strict laws and procedures. As such, it is the responsibility of the company secretary to ensure that the company does not engage in any acts of non-compliance during these exercises. 

 

Assist in Incorporation and Deregistration of the Hong Kong Company

As mentioned above, a company secretary must be identified to complete the Hong Kong company incorporation process. Not only is the company secretary actively involved in the formation of the company, but it must also ensure that during the company deregistration process, the company is wound up according to the rules and regulations set by the relevant department.

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What Makes a Good Company Secretary?

A good company secretary should understand the context, company processes, and policies in order to ensure that the company is compliant with Hong Kong regulations. This is because the directors of the company depend on the company secretary to highlight compliance issues within the company, and to provide solutions.

When appointing an individual as a company secretary, it is not compulsory for limited companies to appoint a licensed company secretary, but it is suggested to appoint a secretary that is a member of the Hong Kong Institute of Chartered Secretaries. This ensures the quality of their work is up to the standard expected, which helps to free quality time spent on handling complex documents.

Why should you use FastLane’s secretarial service?

FastLane has been working with hundreds of companies as their company secretary. With over 6 years of experience in the field of company formation, accounting, and auditing, FastLane understands the needs of startups and small businesses in Hong Kong.

FastLane has significant years of experience helping start-ups by providing company secretarial services. By offering a one-stop solution for businesses in terms of company formation, accounting and auditing, FastLane understands the needs of small businesses in Hong Kong.

Above all, as your company secretary, we make sure that the company’s strategy complies with the statutory requirements as well as to share the latest corporate laws and rules with you. By acting as your company secretary, our knowledge and expertise will allow you to focus on the parts of their business that you love most by delegating the administrative and backroom activities to us.

Take the back seat and let the professionals handle compliance with the authorities.



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