The Companies (Amendment) Ordinance 2018 (“the Amendment Ordinance”) introduces new requirements on the keeping of significant controllers registers by companies. The Amendment Ordinance has commenced operation on 1 March 2018.
To enhance transparency of corporate beneficial ownership in order to fulfil Hong Kong’s international obligations, the Companies Ordinance (Cap. 622) is amended to require a company incorporated in Hong Kong to obtain and maintain up-to-date beneficial ownership information by way of keeping a Significant Controllers Register. The Register should be open for inspection by law enforcement officers upon demand.
Who is a significant controller of a company?
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.
What are the contents of significant controllers register?
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
- 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
- contact details