General
 
Q1.

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

 
Q2.

My company is a registered non-Hong Kong company under Part 16 of the Companies Ordinance (Cap. 622). Is it required to keep a significant controllers register in Hong Kong?

 
Q3.

Is it necessary to deliver the significant controllers register to the Companies Registry for registration?

 
Identifying significant controllers
 
Q4.

Who is a significant controller of a company?

 
Q5.

What should a company do to identify significant controllers?

 
Q6.

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?

 
Q7.

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?

 
Q8.

What should the company do if a significant controller does not reply to the company’s notice within the specified period of 1 month?

 
Content of the significant controllers register
 
Q9.

What are the contents of significant controllers register?

 
Q10.

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

 
Possible Scenarios of Significant Controllers
 
Q11.

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)?

 
Q12.

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?

 
Q13.

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)?

 
Q14.

If Company B is holding 100% of the issued shares of Company A while Company C (which is listed in Hong Kong) is holding 51% of the issued shares of Company B (as shown below), does Company A need to trace upwards to see if any other person has significant control over Company A through Company C?



If Company B is holding 100% of the issued shares of Company A while Company C (which is listed in Hong Kong) is holding 51% of the issued shares of Company B (as shown below), does Company A need to trace upwards to see if any other person has significant control over Company A through Company C?
 
Q15.

If Person 1 directly holds 24% of the issued shares of Company A and at the same time, he also indirectly holds 20% of the issued shares of Company A through Company B and Company C (as shown below), is Person 1 a registrable person of Company A?


If Person 1 directly holds 24% of the issued shares of Company A and at the same time, he also indirectly holds 20% of the issued shares of Company A through Company B and Company C (as shown below), is Person 1 a registrable person of Company A?
 
Q16.

If I am a nominee holding more than 25% of issued shares of a company for my friend, am I a registrable person of the company?

 
Q17.

If the registrable legal entity is an overseas company, is it required to trace further to see if there is any person having significant control over the company?

 
Designated representative
 
Q18.

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

 
Q19.

Can a significant controller of a company be appointed as the designated representative of the company?

 
Q20.

I am appointed as the company secretary of the holding company of a group of companies and I am also the employee of the holding company. Can I be appointed as the designated representative for all the other companies within the group?

 
Location of significant controllers register
 
Q21.

Where should a company keep its significant controllers register?

 
Q22.

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

 
Q23.

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?

 
Q24.

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?

 
Q25.

Is it mandatory to deliver a Form NR2 to the Companies Registry to report the location of the significant controllers register?

 
Law Enforcement Officer
 
Q26.

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

 
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General
 
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 Q26.

 
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Q2.

My company is a registered non-Hong Kong company under Part 16 of the Companies Ordinance (Cap. 622). Is it required to keep a significant controllers register in Hong Kong?

 
Answer:

No, a registered non-Hong Kong company is not required to keep a significant controllers register. Only a local company formed and registered under the Companies Ordinance (Cap. 622) or a former Companies Ordinance, excluding a listed company, is required to keep a significant controllers register.

 
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Q3.

Is it necessary to deliver the significant controllers register to the Companies Registry for registration?

 
Answer:

No. It is not required to deliver the significant controllers register to this Registry for registration. However, the register must be kept at the company’s registered office address or a place in Hong Kong.

 
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Identifying significant controllers
 
Q4.

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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Q5.

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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Q6.

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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Q7.

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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Q8.

What should the company do if a significant controller does not reply to the company’s notice within the specified period of 1 month?

 
Answer:

The company must add a note in its significant controllers register that the company has given a notice to a person whom it knows, or has reasonable cause to believe, to be a registrable person or registrable legal entity of the company but that person has failed to comply with the notice within the specified period of 1 month. Please see Examples of additional matters to be noted in the register.

 
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Content of the significant controllers register
 
Q9.

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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Q10.

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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Possible Scenarios of Significant Controllers
 
Q11.

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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Q12.

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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Q13.

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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Q14.

If Company B is holding 100% of the issued shares of Company A while Company C (which is listed in Hong Kong) is holding 51% of the issued shares of Company B (as shown below), does Company A need to trace upwards to see if any other person has significant control over Company A through Company C?


Although Company C is listed in Hong Kong, it is not a registrable legal entity of Company A and therefore does not fulfill the condition in section 653C.  Company A is required to trace upwards to ascertain if there is any person having significant control over Company A through Company C, i.e. any person having a majority stake in Company C.
 
Answer:

Although Company C is listed in Hong Kong, it is not a registrable legal entity of Company A and therefore does not fulfill the condition in section 653C. Company A is required to trace upwards to ascertain if there is any person having significant control over Company A through Company C, i.e. any person having a majority stake in Company C.

 
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Q15.

If Person 1 directly holds 24% of the issued shares of Company A and at the same time, he also indirectly holds 20% of the issued shares of Company A through Company B and Company C (as shown below), is Person 1 a registrable person of Company A?


Yes, Person 1 is a registrable person of Company A by holding a direct interest in Company A, cumulative with an indirect interest in Company A through Companies C and B (totally more than 25% of the issued shares in Company A).
 
Answer:

Yes, Person 1 is a registrable person of Company A by holding a direct interest in Company A, cumulative with an indirect interest in Company A through Companies C and B (totally more than 25% of the issued shares in Company A).

 
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Q16.

If I am a nominee holding more than 25% of issued shares of a company for my friend, am I a registrable person of the company?

 
Answer:

No, a share held by a nominee for another person is regarded as being held by that other person. Only the particulars of that other person (i.e. your friend) need to be entered into the significant controllers register.

 
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Q17.

If the registrable legal entity is an overseas company, is it required to trace further to see if there is any person having significant control over the company?

 
Answer:

Yes, the company has to carry out investigation to ascertain whether there is any person having significant control over the company through the overseas company.

 
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Designated representative
 
Q18.

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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Q19.

Can a significant controller of a company be appointed as the designated representative of the company?

 
Answer:

Yes, a significant controller can be appointed as the designated representative of a company. The two can be the same person if that person can satisfy any of the following requirements, that is he/she is either :


i)

a director, employee or member of the company who is a natural person resident in Hong Kong; or

ii)

an accounting professional, a legal professional or a TCSP licensee (i.e. a person licensed to carry on a trust or company service business in Hong Kong).

 
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Q20.

I am appointed as the company secretary of the holding company of a group of companies and I am also the employee of the holding company. Can I be appointed as the designated representative for all the other companies within the group?

 
Answer:

A company’s designated representative must be either (i) a director, employee or member of the company who is a natural person resident in Hong Kong or (ii) an accounting professional, a legal professional or a person licensed to carry on a trust or company service business (“a TCSP licensee”). If you are an employee of the holding company, you can be appointed as the designated representative of the holding company. If you are not a director, employee or member of the other companies under the same group, you need to fulfill condition (ii) above before you can be appointed as the designated representative of these companies. In other words, you can be appointed as the designated representative for all the other companies within the group if you are an accounting professional, a legal professional or a TCSP licensee.

 
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Location of significant controllers register
 
Q21.

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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Q22.

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 Q23.

 
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Q23.

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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Q24.

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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Q25.

Is it mandatory to deliver a Form NR2 to the Companies Registry to report the location of the significant controllers register?

 
Answer:

No, a company is not required to deliver a Form NR2 for registration if since its significant controllers register (“SCR”) came into existence, the SCR has at all times been kept at the company’s registered office address.


Furthermore, an existing company (namely, a company which is in existence on 1 March 2018) is not required to deliver the Form NR2 if since 1 March 2018, the SCR has been kept together with the company’s register of members and the company has delivered to the Registrar a Form NR2 in respect of its register of members.

 
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Law Enforcement Officer
 
Q26.

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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