Business / Company Law
.jpeg)
Popular articles
Business / Company Law
- FAQs
The Companies Ordinance (Cap. 622) contains numerous compliance obligations for Hong Kong companies — covering matters such as filing returns, maintaining statutory records, disclosure of company name and liability status, holding meetings, and keeping proper accounts.
Non‑compliance can lead to criminal liability, civil consequences, and continuing daily fines.
Key Penalty Types under the Ordinance:
Civil Consequences:
Personal liability of officers for certain documents (e.g., s.661: failure to state company name on negotiable instruments).
Court orders to compel compliance (e.g., s.657(4)(c); s.610(5) for AGMs).
Definition:
An Annual Return is a statutory document that provides the Companies Registry with up-to-date information about a company’s particulars — such as its registered office address, directors, company secretary, share capital, members, and certain indebtedness. It ensures the public record remains current.
Under Companies Ordinance (Cap. 622), section 662 and Schedule 6 set out the required contents, which include:
- Company name, number, type, and registered office address
- Date to which the return is made up
- Particulars of directors, reserve directors, and company secretary
- Share capital and members (for companies with share capital)
- Indebtedness in respect of mortgages/charges
- For private companies, statements confirming no public share invitation and compliance with member limits
When Must It Be Filed:
- Private companies: Within 42 days after the anniversary of incorporation date (s.662(1)).
- Public companies: Within 6 months after the end of the accounting reference period (s.662(4)(a)).
- Companies limited by guarantee: Within 9 months after the end of the accounting reference period (s.662(4)(b)).
- Registered non-Hong Kong companies: Within 42 days after each anniversary of the date of registration in Hong Kong (s.788(1)).
Penalties for Late Filing:
Failure to file on time is an offence. The company and every responsible person may be liable to a level 5 fine and, for a continuing offence, a further fine of HK$1,000 per day (s.662(6); s.788(3)).
Definition:
An Annual General Meeting (AGM) is a yearly meeting of a company’s shareholders where certain statutory business is conducted — such as receiving the company’s financial statements, electing directors, appointing auditors, and considering dividends. It is a formal mechanism for shareholder engagement and company accountability.
When Required:
Under section 610, Companies Ordinance (Cap. 622):
(1) Subject to subsections (2) and (3), a company must, in respect of each financial year, hold a general meeting as its annual general meeting within:
(a) Private company or company limited by guarantee – 9 months after the end of its accounting reference period;
(b) Other companies – 6 months after the end of its accounting reference period.
- First AGM for a company with an initial accounting period longer than 12 months has special timing rules under s.610(2).
- Dormant companies (s.611) are exempt.
- AGMs can be dispensed with if all matters are done via written resolution and statutory documents are circulated (s.612), or if the company has only one member, or if members resolve to dispense with AGMs under s.613.
- Failure to hold an AGM within the required period can lead to court orders (s.610(5)-(8)) and offences punishable by fines (s.610(9)).
A Shareholders’ Agreement is a private contract between shareholders, supplementing the company’s Articles of Association. While the Companies Ordinance (Cap. 622) governs statutory rights, the agreement can regulate matters not covered or to provide clearer mechanisms. Hong Kong case law (e.g., DENNIS KWOK HON MING v POON SUI CHEONG ALBERT [2019] HKCA 461) confirms that courts will interpret such agreements according to contractual principles, including implied terms where necessary.
Shareholders can remove a director by passing an ordinary resolution at a general meeting. The company must give special notice (at least 28 days before the meeting) of the proposed resolution. The director must be given a copy of the notice and has the right to attend, speak, and submit written representations to be circulated to members. If the resolution passes, the director is removed, and any resulting vacancy can be filled at the meeting or later as a casual vacancy.
Duty of care, skill and diligence – Section 465(2) codifies a mixed objective/subjective test:
Objective: General expectations of a reasonable director.
Subjective: Director’s actual knowledge, skill, and experience.
Avoidance of conflicts of interest Loans, transactions, or guarantees involving directors or connected entities without prescribed member approval may be prohibited.
Disclosure obligations – Directors must declare material interests in transactions (Sections 536–540) and report permitted indemnity provisions (Section 470).
Corporate governance compliance – Maintain proper accounting records, minutes, and comply with filing obligations.
Specific prohibitions – e.g., Section 456 prohibits corporate directorships in certain companies; Section 480 prohibits undischarged bankrupts from acting as directors.
Definition:
Deregistration is a simplified, low‑cost procedure under Part 15 of the Companies Ordinance (Cap. 622) for dissolving a defunct private company or company limited by guarantee without going through formal winding‑up.
Eligibility:
Section 749 states deregistration is available only for:
- Private companies limited by shares
- Companies limited by guarantee
- Excludes public companies and certain regulated entities (e.g. banks, insurers, licensed corporations under Cap. 571).
Conditions (s.750(2)–(5)):
All of the following must be met:
- All members agree to deregistration.
- The company has never commenced business OR has ceased business for at least 3 months before the application.
- No outstanding debts or liabilities.
- Not a party to any legal proceedings.
- Assets do not include immovable property in Hong Kong.
- If a holding company, none of its subsidiaries own immovable property in Hong Kong.
- Obtain a Notice of No Objection from the Commissioner of Inland Revenue.
Procedure:
- Apply to the Companies Registry within 3 months of the issue date of the Notice of No Objection, submitting:
- Form NDR1
- Original Notice of No Objection
- Prescribed fee
- Any further information requested by the Registrar
- Registrar publishes a Notice of Proposed Deregistration in the Gazette.
- If no objection within 3 months, Registrar publishes a Final Notice in the Gazette — company is dissolved on publication.
Effect (s.752, s.764):
- On deregistration, all property vests in the Government as bona vacantia.
- Directors’ and members’ liabilities continue (s.756).
- Company may be restored within 20 years by administrative application (s.760–762) or court order (s.765–768).
The key statutory requirements for incorporation include:
Section 67(1), Companies Ordinance (Cap. 622):
One or more persons may form a company by—
- signing the articles of association of the company; and
- delivering to the Registrar for registration—
- an incorporation form; and
- a copy of the articles of association.
Main incorporation requirements:
- Lawful Purpose – Company must be formed for a lawful purpose (s. 67(2)).
- Articles of Association – Must comply with ss. 75–86, including:
- State company name (s. 81)
- Liability clause (s. 84) – for limited by shares: liability limited to unpaid amount on shares; for limited by guarantee: maximum contribution amount.
- Incorporation Form (s. 69–70) – Must include:
- Proposed company name (English and/or Chinese, meeting naming rules in ss. 100–102)
- Registered office address in Hong Kong
- Company type (limited by shares/guarantee, private/public)
- Number of members (if limited by guarantee)
- Statement of compliance with CO requirements.
- Founder Member Signature – Incorporation form must be signed by a founder member (s. 69).
- Filing with Registrar – Deliver incorporation form and articles to Registrar of Companies, pay prescribed fee.
- Certificate of Incorporation – Issued by Registrar upon registration (s. 71), and is conclusive evidence of compliance (s. 72).
- Minimum Director Requirement –
- Private company: at least one director who is a natural person (ss. 454, 457)
- Company limited by guarantee: at least two directors (s. 453); body corporate cannot be a director (s. 456).
- Company Name Endings –
- Limited by shares/guarantee: must end with “Limited” or “有限公司” (s. 102) unless exempt under s. 103.
- Business Registration – Separate requirement under Business Registration Ordinance (Cap. 310) – must register with Inland Revenue Department within one month of commencement.
Step 1: Choose company type and name.
Company limited by shares:
- The liability of members is limited by the articles of association to the amount unpaid on the shares respectively held by them.
Company limited by guarantee
- Where there is no share capital and the liability of members is limited by the articles of association to the amount that the members respectively undertake to contribute to the assets of the company in the event of its being wound up. Non-profit-making organisations are usually registered as guarantee companies.
Choose Company Name
Step 2: Prepare Articles of Association.
Step 3: Submit the application:
Submit the following documents to the Companies Registry:
- Form NNC1 / NNC1G and to the Companies Registry.
- Articles
- A Notice to Business Registration Office
Step 4: Pay incorporation and business registration fees
Step 5: Receive a Certificate of Incorporation — the company legally exists from this date.
References: Companies Registry - How to register a new company