In Hong Kong, a company secretary plays a vital part within the structure of a company, as this role serves the functions of ensuring compliance with corporate governance regulations, keeping a proper administrative record and acting as a liaison between the board of directors and the shareholders of the company. In short, this specific position ensures the organisation or company operates smoothly while adhering to the best practices and legal regulations. In this blog, we’ll further explore the qualifications required for the role, its duties and responsibilities, considerations for appointment and other additional information.
Importance of Having a Company Secretary in Hong Kong
Having a qualified company secretary is essential for Hong Kong companies for several reasons:
- Compliance: The company secretary plays a pivotal role in ensuring the company adheres to the Companies Ordinance and other relevant regulations. This includes maintaining accurate records, filing necessary documents, and conducting statutory meetings.
- Governance: The company secretary assists the board of directors in fulfilling their governance responsibilities, providing advice on corporate governance best practices and ensuring that the company operates transparently and ethically.
- Risk Management: By understanding the company’s legal and regulatory obligations, the company secretary can help identify and mitigate potential risks, protecting the company’s interests.
- Efficiency: The company secretary can streamline administrative processes, saving the company time and resources. This can include managing the company’s share register, preparing board and shareholder meeting materials, and handling correspondence.
- Professional Representation: A qualified company secretary can provide professional advice and guidance to the company, representing its interests in dealings with government agencies, regulators, and other stakeholders.
What Are the Roles and Responsibilities of a Company Secretary?
The roles and responsibilities of a company secretary in Hong Kong are diverse and encompass a wide range of tasks. Some key responsibilities include:
- Corporate governance: Advising the board of directors on corporate governance matters, ensuring compliance with best practices, and assisting in the development of corporate governance policies.
- Company law compliance: Ensuring that the company complies with all relevant company law requirements, including the Companies Ordinance, the Corporate Governance Code (CG Code), other applicable regulations, and any updates or changes in legislation.
- Record keeping: Maintaining accurate and up-to-date records of the company’s activities, including minutes of meetings, resolutions, and share registers.
- Statutory filings: Preparing and filing necessary statutory returns and documents with the Companies Registry, such as annual returns, financial statements, and notification of changes in company information.
- Shareholder relations: Managing relationships with shareholders, handling shareholder queries, and organising shareholder meetings.
- Secretarial services: Providing general secretarial support to the board of directors and senior management, including arranging annual general meetings (AGMs) and extraordinary general meetings (EGMs), drafting correspondence, and handling administrative tasks.
Who Needs a Company Secretary?
Every limited company is mandated to have a company secretary by the Companies Ordinance in Hong Kong. The company secretary has to be a Hong Kong resident or a corporate entity with a local registered office. If a company fails to appoint one, they may need to pay a fine of up to HK$50,000, along with an additional daily default fine of HK$700 for each day should the situation continue. In severe cases, individuals who are responsible for the company’s legal compliance can face imprisonment.
What to Consider When Appointing a Company Secretary?
Several crucial factors must be considered when a company secretary is appointed. A company should examine whether the candidate’s qualifications and experiences are sufficient to handle the relevant duties and responsibilities and also the costs planned for the position.
FAQ
How can you change your company secretary?
Any business that wishes to change its company secretary must inform its current company secretary of this decision. Next, the company must fill in the ND2A form and submit it to the Companies Registry within 15 days of the new appointment of the secretary. The board must then pass a resolution to confirm the employment.
Why should you outsource corporate secretarial functions?
Outsourcing the duties and responsibilities of a corporate secretary to a professional firm or experienced service provider allows your company to reduce your internal workload and costs so you can focus on your core business operation. This approach helps streamline the whole work process and increases the efficiency and productivity of your staff. If you need any help with your corporate secretarial functions, please get in touch with NOVA.
