Q1.

What are the new requirements of the Companies (Amendment) Ordinance 2018 (“the Amendment Ordinance”)?

 
Q2.

Who is a significant controller of a company?

 
Q3.

What should a company do to identify significant controllers?

 
Possible Scenarios
 
Q4A.

My company is a small private company with two shareholders, each holding 50% of the shares of the company. Who is / are my company’s significant controller(s)?

 
Q4B.

My company is a small private company with only one Hong Kong company, ABC Profits Limited, as its sole shareholder. Is ABC Profits Limited the only significant controller of my company?

 
Q4C.

My company is a small private company with only one corporate shareholder which is an overseas company incorporated in the British Virgin Islands (“BVI). The BVI company is wholly owned by me. Who is / are my company’s significant controller(s)?

 
Q5.

In taking reasonable steps to identify its significant controllers, under what circumstances is a company not required to issue a notice to a person that is known to be its significant controller?

 
Q5A.

My company is a small private company. I am the sole director, sole shareholder and sole beneficial owner. If I have informed the company that I am the significant controller and have provided all my required particulars to the company, is it still necessary for the company to send me a notice?

 
Q6.

What are the contents of significant controllers register?

 
Q7.

Is it necessary for a company to keep a significant controllers register if it has no significant controller?

 
Q8.

What is a designated representative? Who may be a designated representative?

 
Q9.

Where should a company keep its significant controllers register?

 
Q10.

Do I need to report the location of significant controllers register to the Companies Registry?

 
Q11.

My company was incorporated before 1 March 2018, the date when the Companies (Amendment) Ordinance 2018 came into operation. The significant controllers register of the company is kept at the same place as the register of members (namely, at the office address of my company secretary). My company has already informed the Companies Registry about the location of the register of members in Form NR2 before. Do I need to deliver a fresh Form NR2 to report the location of the significant controllers register?

 
Q12.

My company’s significant controllers register is kept at the registered office. Do I need to report the location of the register to the Companies Registry using Form NR2?

 
Q13.

Which law enforcement officers will have access to the significant controllers register?

 
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Q1.

What are the new requirements of the Companies (Amendment) Ordinance 2018 (“the Amendment Ordinance”)?

 
Answer:

Under the Amendment Ordinance, all companies incorporated in Hong Kong (except listed companies) are required to :-


identify and ascertain a person / persons who has / have significant control over the company; and

maintain a significant controllers register to be accessible by law enforcement officers upon demand. Please also see Q13.

 
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Q2.

Who is a significant controller of a company?

 
Answer:

A significant controller includes :-

a registrable person who is a natural person that has significant control over the company; and

a registrable legal entity e.g. a company, which is a shareholder of the company that has significant control over the company.


A person has significant control over a company if one or more of the following 5 conditions are met:

The person holds, directly or indirectly, more than 25% of the issued shares in the company or, if the company does not have a share capital, the person holds, directly or indirectly, a right to share in more than 25% of the capital or profits of the company;

The person holds, directly or indirectly, more than 25% of the voting rights of the company;

The person holds, directly or indirectly, the right to appoint or remove a majority of the board of directors of the company;

The person has the right to exercise, or actually exercises, significant influence or control over the company;

The person has the right to exercise, or actually exercises, significant influence or control over the activities of a trust or a firm that is not a legal person, but whose trustees or members satisfy any of the first four conditions in relation to the company.


Please refer to the Guideline on the Keeping of Significant Controllers Registers by Companies (pdf format) for details and examples.

 
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Q3.

What should a company do to identify significant controllers?

 
Answer:

A company is required to take reasonable steps to identify the significant controller(s). The steps include reviewing the company’s register of members, articles of association, shareholders agreements or other agreements and 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.

 
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Possible Scenarios
 
Q4A.

My company is a small private company with two shareholders, each holding 50% of the shares of the company. Who is / are my company’s significant controller(s)?

 
Answer:

A person who holds, directly or indirectly, more than 25% of the issued shares in the company, is a significant controller. Therefore, both shareholders are the significant controllers of your company and the particulars of both shareholders should be entered into the significant controllers register.

 
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Q4B.

My company is a small private company with only one Hong Kong company, ABC Profits Limited, as its sole shareholder. Is ABC Profits Limited the only significant controller of my company?

 
Answer:

No. If there is a natural person A, who has significant control over your company through ABC Profits Limited, A is also the significant controller of your company. The particulars of ABC Profits Limited and A should be entered into the significant controllers register.

 
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Q4C.

My company is a small private company with only one corporate shareholder which is an overseas company incorporated in the British Virgin Islands (“BVI). The BVI company is wholly owned by me. Who is / are my company’s significant controller(s)?

 
Answer:

A person holds, directly or indirectly, more than 25% of the issued shares in the company, is a significant controller. Therefore, both the BVI company and you are the significant controllers of your company. The particulars of the BVI company and you should be entered into the significant controllers register.

 
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Q5.

In taking reasonable steps to identify its significant controllers, under what circumstances is a company not required to issue a notice to a person that is known to be its significant controller?

 
Answer:

In the case of a registrable person, if the company has already been informed of the person’s status as being its significant controller and all of the person’s required particulars have been provided to the company by the person or with the person’s knowledge, the company is not required to issue a notice to the person.


In the case of a registrable legal entity, the company has already been informed of the entity’s status as being its significant controller and all of the entity’s required particulars have been provided to the company, the company is not required to issue a notice to the entity.

 
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Q5A.

My company is a small private company. I am the sole director, sole shareholder and sole beneficial owner. If I have informed the company that I am the significant controller and have provided all my required particulars to the company, is it still necessary for the company to send me a notice?

 
Answer:

No. If the company has already been informed of your status as being its significant controller and all your required particulars have been provided to the company by you or with your knowledge, it is not necessary for the company to issue a notice to you.

 
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Q6.

What are the contents of significant controllers register?

 
Answer:

The significant controllers register must contain, among others, the required particulars of the significant controller(s) and contact details of the designated representative of the company.


The particulars required include:


For a significant controller

name

for a registrable person,

correspondence address, identity card number (if the person does not have an identity card, the number and issuing country of the passport)

for a registrable legal entity (e.g. a company),

legal form, registration number, place of incorporation (governing law) and address of registered office

date of becoming a significant controller

nature of control over the company


For a designated representative

name

contact details


Please refer to the Guideline on the Keeping of Significant Controllers Registers by Companies (pdf format) for details.

 
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Q7.

Is it necessary for a company to keep a significant controllers register if it has no significant controller?

 
Answer:

Yes. If the company knows that it has no significant controller, it must state this fact in the significant controllers register.

 
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Q8.

What is a designated representative? Who may be a designated representative?

 
Answer:

A company must designate at least one person as its representative to provide assistance relating to the company’s significant controllers register to a law enforcement officer.


A company’s designated representative must be either a shareholder, director or an employee of the company who is a natural person resident in Hong Kong or, alternatively, an accounting professional, a legal professional or a person licensed to carry on a business as trust or company service provider.

 
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Q9.

Where should a company keep its significant controllers register?

 
Answer:

The significant controllers register can be kept at the registered office of the company or any other place in Hong Kong.

 
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Q10.

Do I need to report the location of significant controllers register to the Companies Registry?

 
Answer:

Unless the significant controllers register is kept at the registered office of the company, a company must notify the Registrar of the place where the significant controllers register is kept or any change thereafter in Form NR2 within 15 days after the significant controllers register is first kept at that place or the change, as appropriate.


However, an existing company is not required to give notification to the Registrar if the significant controllers register is kept at the same place where the company’s register of members is kept. Please also see Q11.

 
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Q11.

My company was incorporated before 1 March 2018, the date when the Companies (Amendment) Ordinance 2018 came into operation. The significant controllers register of the company is kept at the same place as the register of members (namely, at the office address of my company secretary). My company has already informed the Companies Registry about the location of the register of members in Form NR2 before. Do I need to deliver a fresh Form NR2 to report the location of the significant controllers register?

 
Answer:

No. An existing Company is not required to give notification to the Registrar if the significant controllers register is kept at the same place where the company’s register of members is kept.

 
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Q12.

My company’s significant controllers register is kept at the registered office. Do I need to report the location of the register to the Companies Registry using Form NR2?

 
Answer:

No.

 
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Q13.

Which law enforcement officers will have access to the significant controllers register?

 
Answer:

Law enforcement officers of the following authorities will have access to the significant controllers register:

Companies Registry

Customs and Excise Department

Hong Kong Monetary Authority

Hong Kong Police Force

Immigration Department

Inland Revenue Department

Insurance Authority

Independent Commission Against Corruption

Securities and Futures Commission

 
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