A director plays a key role in ensuring the successful operation of a company. Selecting a qualified and responsible individual for this position is crucial for the long-term prosperity of the business. It is important for every entrepreneur to understand the legal obligations, rights, and risks associated with Hong Kong’s legislation and its requirements for this role.
One of the key indicators of a company’s success is its leadership. The director is responsible not only for the operational activities of the entire business but also for ensuring full compliance with Hong Kong’s laws.
A proper understanding of a director’s duties, the process of appointment and potential removal, and the application of these aspects in practice allows for successful business management in the Hong Kong SAR.
This guide will explore all the nuances related to the role of a director in a Hong Kong company and offer useful tips and recommendations for entrepreneurs planning to conduct business in this jurisdiction.
Requirements for Appointment as a Director
In Hong Kong, the process of appointing a company director is governed by the Companies Ordinance (CO). To become a director, a candidate must meet a number of legal requirements aimed at ensuring effective performance of duties and preventing potential violations. Let’s consider the main requirements for the position of a director in a Hong Kong company.
Age
The candidate must be over 18 years old. Hong Kong law does not allow minors to be appointed to this position.
Legal Capacity
The candidate must be fully legally capable and not declared bankrupt. This means they must be able to enter into contracts and perform other legally significant actions.
Clean Legal Record
The candidate must not have convictions for offenses related to fraud or corporate crimes. This condition helps prevent the appointment of individuals who could threaten the legality of the company’s operations.
Residency
A director can be either a resident or a non-resident of Hong Kong. This provision makes Hong Kong particularly attractive for international companies, as it allows representatives from other countries to be appointed to this position. No visa or special permit is required for the appointment.
These requirements ensure that directors can effectively manage the company and make informed decisions in the interests of all stakeholders.
Requirements for the Number of Directors
Hong Kong law sets requirements for the minimum and maximum number of directors depending on the type of company. These requirements are aimed at ensuring proper management and control.
Private Companies Limited by Shares:
- Minimum number of directors: 1 (one) director
- Maximum number of directors: unlimited.
- Corporate directors: A legal entity can be a director, provided that at least one individual also holds this position.
Public Companies, Private Companies Part of a Group with a Public Company, and Companies Limited by Guarantee:
- Minimum number of directors: two directors.
- Corporate directors: A corporate director cannot be appointed; all directors must be individuals.
These requirements ensure that companies have a sufficient number of directors for effective management and compliance with corporate norms.
The powers of a company director in Hong Kong are regulated by the Companies Ordinance, the company’s Articles of Association, and Board resolutions. It is important for the director to act in good faith and use their powers solely in the interests of the company and its shareholders.
It is important to understand that the Hong Kong government categorizes companies into two types:
Limited by Shares:
These are companies where the liability of shareholders is limited to the amount they agree to pay for their shares. This is a common type of commercial company operating for profit. Shareholders can receive dividends from the company’s profits.
Limited by Guarantee:
A company where members do not have shares, and their liability is limited to the amount they agree to contribute in the event of the business’s liquidation. This type of company is often used for non-profit organizations, charitable foundations, and associations. Members do not receive profits, and their role is to support the company’s activities.
Residency and Citizenship Requirements
One of the attractive features of Hong Kong’s legislation is the lack of strict residency and citizenship requirements for company directors. This makes the jurisdiction appealing to international investors who can manage a business without the obligation to reside in Hong Kong.
In Hong Kong, there are no residency and citizenship requirements for directors, making the jurisdiction attractive for international companies. This is largely due to the presence of the “corporate secretary” role. While the secretary does not replace the director, they professionally assist in complying with all Hong Kong legal requirements. The corporate secretary must be a resident of Hong Kong. The secretary ensures that the company adheres to all legal norms and requirements.
Non-residents appointed as directors must be prepared for constant communication with the company and the corporate secretary. This is necessary for the timely and regular fulfillment of all legally mandated procedures.
This structure allows companies to effectively manage their affairs regardless of the location of their directors.
Appointment Process of a director in Hong Kong company
The first director(s) of a company are appointed at the time of its registration. For this, the company’s shareholders adopt the First Resolution, which includes the decision to appoint a director. Subsequently, the director must confirm their appointment in writing. If necessary, an employment contract may be concluded with the director beforehand.
Documents required for the appointment of the first director of a company in Hong Kong:
Mandatory documents:
- Copies of identification documents
- Proof of current residential address (utility bill, mobile phone bill, bank statement, or other document containing the address).
- First Resolution of shareholders.
- Consent to act as a director. This consent must be submitted to the Hong Kong Companies Registry either electronically during company registration (signed by the director with their electronic signature) or in paper form using Form NNC3. Form NNC3 must be delivered to the Companies Registry no later than 15 days after the company’s registration date.
Optional documents:
- Employment contract (typically with a Hong Kong resident).
- Service agreement (typically with a non-resident of Hong Kong).
- Educational documents.
- Bank details (for salary payments).
Director remuneration should be determined by the company at a general meeting and may:
- take any form; and
- include any arrangements related to pension benefits.
If the shareholder appoints themselves as the director, concluding a contract and salary payment is not mandatory. Hiring an external individual will likely require discussion and agreement on work conditions, formalized in a corresponding contract. With a Hong Kong resident, this is typically an official employment contract.
Grounds for Termination of a Director’s Powers in Hong Kong
A director’s powers may be terminated on the following grounds:
- Resignation
A company director may resign at any time unless otherwise stipulated by the company’s articles or agreement with the company. After resignation, the company must notify the Hong Kong Companies Registry in accordance with section 645(4).
If the director believes the company will not send the notification, they must send a resignation notice to the Registrar for registration. The notice must include whether the company’s articles or agreement require a resignation notice and if it has been sent. If required, the resignation takes effect only after the director sends a written notice:
- in accordance with the requirement.
- by placing it at the company’s registered office.
- by sending it to the company in printed or electronic form.
- Removal by company decision
The company has the right to remove a director before the end of their term by passing an ordinary resolution at a general meeting. This is possible even if the company’s articles or agreement with the director state otherwise, according to the Companies Ordinance (Chapter 622, Section 462). Special notice is required for the removal or appointment of a director (according to Section 578 of Chapter 622 of the Companies Ordinance) – the resolution is not effective if notice of intention to move it was not given to the company at least 28 days before the meeting at which it is moved. The company should, if practicable, notify its members of the resolution at the same time and in the same manner as it notifies them of the meeting. Removal does not deprive the director of the right to compensation or damages.
Director’s right to contest dismissal: The director has the right to:
- speak at the meeting where their removal is discussed.
- submit written statements to the company and request their distribution among members.
The company must comply with the director’s request unless the court relieves it from doing so. The court may relieve the company if the request was made abusively or for defamation. If the company fails to fulfill its obligations, the removal decision may be declared invalid.
- Company liquidation
In the event of company liquidation, the director’s powers automatically cease as the company ceases to exist. In compulsory liquidation, after the appointment of a provisional liquidator or the issuance of a winding-up order, the directors’ powers cease. However, they retain certain duties:
- maintaining records.
- preparing a report on the company’s current affairs.
- Financial insolvency
If a director becomes bankrupt, they lose the right to hold the position of director. They cannot participate in company management until discharged from bankruptcy. Holding the position while bankrupt can only be done with court permission.
- Absence from meetings
If a director is absent from board meetings for more than 6 months without permission, this may be grounds for termination of their powers.
- Incapacity
If a director is declared incapacitated, they cannot continue to perform their duties.
Process of Changing a Director in Hong Kong
Changing a director in a Hong Kong company involves several key steps.
- Review of the Company’s Articles of Association
Before appointing a new director, it is necessary to review the Articles of Association for any restrictions or special procedures related to the removal and appointment of directors.
- Termination of the Current Director’s Powers
The most common way to terminate a director’s powers is through voluntary resignation. A director can resign by submitting a written notice. If applicable, the company must pay any due salary for the time worked and unused leave.
If voluntary resignation is not possible, one must determine the most appropriate method for terminating the director’s powers, as described in the previous section, and follow the procedures. It is recommended to consult a specialist to avoid violating labor laws during the termination process.
Ideally, by the time the current director’s powers are terminated, the company should already have a candidate for the new director position.
- Due diligence procedure for the new Director
To appoint a new director, the following documents must be collected:
- A copy of the identity card (ID for Hong Kong residents) or copies of identification documents for non-residents.
- Proof of residential address (e.g., bank statement, utility bill, or mobile phone bill issued no more than 60 days before the appointment).
- Other documents and information that may be relevant to the company.
- Resolution of Appointment
After obtaining consent for the appointment, the shareholders or the Board of Directors must pass a resolution to appoint the new director. This is an official decision and must be recorded in the company’s meeting minutes. The resolution should include the following information:
- Effective date of the change: On this date, the person responsible for the appointment will officially assume their duties, along with implied powers and responsibilities. It becomes a key date for all subsequent company reports to Hong Kong authorities.
- Full name: The director’s name must match the name on the official document issued by the authorities, such as an ID or passport for foreign nationals.
- Current residential address: This section should also include the permanent or registered address.
The resolution for electing a new director must be signed by all current directors as a sign of their agreement.
- Submission of ND2A Notification Form to the Companies Registry
According to Section 645 of the Hong Kong Companies Ordinance, within 15 days of appointing a new director, the company must notify the Hong Kong Companies Registry (CR) of the changes.
This is done by submitting the ND2A form with detailed information about the new director. Failure to comply with this requirement may result in significant fines.
To confirm the appointment of the new director, it is important to ensure that the ND2A form is accepted and registered by the Hong Kong Companies Registry.
In case of late notification, companies face fines of up to HKD 25,000 and daily fines of HKD 700 for each day of delay.
- Company Directors Register
The date and reason for the termination must be entered into the directors’ register, along with the full name and appointment date of the new director.
- Assumption of Duties
All company directors are advised to familiarize themselves with the “Guide on Directors’ Duties” published by the Hong Kong Companies Registry. This guide contains all key duties and requirements. Additionally, internal instructions and regulations will be useful to ensure the director adheres to all required corporate standards.
Useful Resources for the New Company Director
- Guide on Directors’ Duties,” Hong Kong Companies Registry
- “Guiding Principles for Directors,” Hong Kong Institute of Directors (hkiod.com)
- “Guide for Independent Directors,” Hong Kong Institute of Directors (hkiod.com)
- Corporate Governance Code, Hong Kong Stock Exchange (hkex.com)
Duties of a Company Director in a Hong Kong company
A company director in Hong Kong is responsible for complying with legal and corporate norms. The main duties of a director are to ensure transparent management of the company and protect the interests of its shareholders. Neglecting these duties can lead to legal liability, including criminal charges. There are both general and Hong Kong-specific duties that a director must fulfill. Let’s examine each in detail.
General Duties:
- Compliance with Legislation
The director must ensure that the company complies with all laws of the Hong Kong SAR, including tax laws, accounting and financial reporting rules, preservation of primary documents, and corporate norms.
- Responsibility to Shareholders
The director must act in the interests of the company’s shareholders. They must protect the interests of the business owners and avoid situations where personal interests may conflict with corporate interests.
- Management of Operational Activities
The director’s tasks include making operational and managerial decisions, managing personnel, overseeing contract execution, and managing the company’s assets.
- Compliance with Corporate Governance Standards
The director must adhere to corporate ethics standards and ensure transparency in all company operations. It is important that all actions of the director are aimed at benefiting the company and its shareholders.
Specific Duties:
- Control over Compliance with Occupational Safety and Environmental Protection Standards
Depending on the company’s field of activity, the director must ensure that the company complies with legislation on employee safety (internal company environment) and environmental protection (external environment).
- Due Diligence
The director must exercise due care and diligence when making decisions on behalf of the company. This means that all decisions should be based on a thorough analysis of the data available at the time of the decision.
Key Principles of Directors’ Duties in Hong Kong
Principle 1: Act Honestly in the Interests of the Company
A director must act honestly and in the interests of the company as a whole. This means considering the interests of all shareholders, both current and future, and striving for fair outcomes for all parties involved.
Principle 2: Use Powers for Proper Purposes
A director should use their powers solely for the purposes for which they were granted. The primary aim should be the benefit of the company. If it is found that powers were used for personal gain or control over the company, such actions may be annulled, even if the director acted with good intentions.
Principle 3: No Delegation Without Permission and Independence of Judgment
A director should not delegate their powers to others unless permitted by the company’s articles or a special resolution. They must make decisions independently and exercise their own judgment.
Principle 4: Exercise Care, Skill, and Diligence
According to the law, a director must exercise reasonable care, skill, and diligence. This means acting with the level of effort and professionalism expected from someone with their knowledge and experience in the role.
Principle 5: Avoid Conflicts of Interest
A director must avoid situations where their personal interests may conflict with the interests of the company.
Principle 6: Transactions with Personal Interest
If a director has a material interest in a transaction involving the company, they must disclose the nature and extent of their interest. Until these obligations are fulfilled, the director should not allow the company to enter into such a transaction. In some cases, the company’s articles may require approval from other directors or members.
Principle 7: Prohibition on Using Position for Personal Gain
A director should not use their position to gain personal benefits or benefits for others if it harms the company.
Principle 8: Use of Company Resources and Information
A director should not use the company’s resources, information, or opportunities for personal gain unless approved at a general meeting of the company.
Principle 9: Receiving Benefits from Third Parties
A director or former director should not accept benefits from third parties related to their position unless approved by the company or related to the performance of their duties.
Principle 10: Compliance with Articles and Resolutions
A director must act in accordance with the company’s articles and comply with all resolutions passed under those articles.
Principle 11: Maintenance of Accounting Records
A director must take all necessary measures to ensure accurate and complete accounting records. This is necessary to ensure that the company’s transactions are transparent and that its financial position and performance are presented with reasonable accuracy. A director should also avoid situations where the company takes on new credit obligations knowing it cannot avoid insolvency, to comply with laws against fraudulent trading.
Rights and Powers of a Director in Hong Kong
A company director in Hong Kong holds significant powers that enable them to make decisions on behalf of the company. However, this role comes with a high level of responsibility. The director’s powers are governed by the company’s Articles of Association and Hong Kong law.
Main Powers of A Hong Kong compny director:
- Signing Contracts and Agreements
A director has the authority to enter into legally binding contracts and agreements on behalf of the company. These include commercial transactions, employment contracts, and investment agreements. By signing contracts, the director acts in the company’s interests and is responsible for fulfilling the obligations of these agreements.
- Managing Company Accounts and Assets
A director oversees the use of the company’s assets, including financial resources, equipment, real estate, and intellectual property. They must make decisions aimed at preserving and enhancing the company’s assets while avoiding conflicts of interest.
- Representing the Company in International Markets
A director serves as the official representative of the company on the international stage, participating in negotiations, conferences, and other events. This also includes entering into international agreements and arrangements.
- Managing Human Resources
A director’s duties include managing the company’s personnel. This involves making decisions about hiring and firing employees, as well as setting compensation and motivation systems.
- Distributing Dividends
A director has the right to make decisions about distributing dividends among the company’s shareholders based on business profits. It is important to pay special attention to the interests of all shareholders and act within the legal framework.
Limitations of Powers of a director in Hong Kong
While a director has many rights, there are also limitations designed to prevent abuse of power. These include:
- Prohibition on Using Powers for Personal Gain
A director is not allowed to enter into transactions where they or their family members have a personal interest without the approval of shareholders or the Board of Directors. All such actions must be transparent and sanctioned by the company’s top management.
- Prohibition on Exceeding Powers
A director must adhere to the limits of their powers as set out in the company’s Articles of Association. If powers are restricted, the director cannot exceed them without appropriate authorization.
Limitations of Powers of a Hong Kong company director
A director cannot use their powers for personal gain. The law prohibits entering into transactions where they or their family members have a material interest without the approval of shareholders or the Board of Directors. Any conflicts of interest must be declared, and the director must avoid situations where their personal interests may conflict with the company’s interests.
Director’s Liability in Hong Kong
A company director in Hong Kong bears legal responsibility for their actions and decisions related to managing the company. This includes both administrative and criminal aspects, and in case of legal violations, a director may face various types of liability. The main aim of the legislation is to ensure that directors act in the interests of the company and its shareholders while adhering to legal norms. Let’s explore the main types of director liability, along with examples of violations and their consequences.
Types of Liability
- Administrative Liability
A director may face administrative liability for mismanagement of corporate affairs and accounting. For instance, if the company fails to submit reports on time, update information in the Companies Registry, or violates other legal requirements, the director will be fined.
- Criminal Liability
A director can be held criminally liable if their actions constitute a crime. Examples include fraud, bribery, intentional misrepresentation of financial data to evade taxes, or violations of consumer protection laws. Criminal liability also arises if a director knowingly leads the company to bankruptcy through illegal actions.
- Qualification Liability
If a director fails to fulfill their duties, shareholders or other interested parties may file for the director’s disqualification. Under the Companies Ordinance, a director can be disqualified for a certain period if it is proven that they acted against the company’s interests or made gross management errors.
A director must protect the interests of the company’s shareholders and act in their favor. If shareholders prove that the director acted in their personal interests, infringing on shareholders’ rights, they may be held liable.
If the company fails to meet its legal or financial obligations, such as paying taxes or complying with labor laws, the director may be held liable for both administrative and criminal offenses. In some cases, the director may bear personal liability for the company’s debts if their actions led to the business’s financial collapse.
Types of Director Liability in Hong Kong
- Administrative Liability: Fines for late reporting or other corporate law violations.
- Criminal Liability: For crimes such as fraud, bribery, data concealment, or abuse of power.
- Qualification Liability: A director may be disqualified for actions contrary to the company’s interests.
Court Cases
| April 11, 2024, Case Against Director of Yat..In..Log..Limited The director was held accountable by the Labor Department for violating the Employment Ordinance. In the West Kowloon Magistrates’ Court, the director pleaded guilty and was fined HKD 51,000. They were also ordered to pay approximately HKD 112,000 in arrears to the relevant employees through the court. The company deliberately failed to pay wages to four employees and notification compensation totaling about HKD 100,000 within seven days after the pay period and termination of employment, as required by the Employment Ordinance. Additionally, the company did not pay awarded sums of about HKD 89,000 to three employees within 14 days after the date set by the Labor Tribunal. The director was found guilty of consenting to or neglecting these violations. A Labor Department representative stated that the court’s decision sends a clear signal to all employers and directors about the necessity of timely wage payments in accordance with the law and Labor Tribunal decisions. The Labor Department emphasized that it will not tolerate such violations and will actively protect employees’ rights. |
| March 28, 2024, Decision Against Director of Cha..Du..Ent..Limited (Case No: HCMP 1462/2019) The Securities and Futures Commission (SFC) obtained a court order for compensation and disqualification of the former financial director. They are required to pay HKD 163 million with interest to the company for misconduct identified by the SFC. The SFC found that the director allowed the former chairman and executive director to unlawfully appropriate funds from the company’s share and bond placements totaling HKD 163 million. They took steps to conceal the misappropriation from auditors and the board by providing falsified documents, allegedly showing that the chairman returned the net funds raised by the company. Additionally, the director was responsible for inflating cash and bank balances in the company’s financial statements and providing false or misleading information about the intended use of net funds in share and bond placement announcements. Although the director did not personally receive the misappropriated funds, the court ruled that their actions in concealing and failing to alert the company’s management warranted compensation. The director was also disqualified from managing companies for 10 years and required to pay SFC’s costs. The SFC’s executive director emphasized that the court’s decision serves as a warning that corporate misconduct will be severely punished, even if there was no personal gain. |
| Case of Director’s Removal from M..Os.. Limited In the case of the director against M..Os.. Limited, the court ruled that a Hong Kong company is not required to provide reasons for a director’s removal. The director was removed by shareholder decision but did not receive explanations and filed a lawsuit to invalidate the decision. The court dismissed the lawsuit, stating that the company acted within the law, which allows for director removal without explanation. The court also emphasized that it would not interfere in the company’s internal affairs if all legal procedures were followed. This case confirms that reasons are not required for director removal in Hong Kong and highlights the challenges in contesting such decisions. |
| Failure to Submit Reports to the Companies Registry A director of several companies was convicted for failing to submit annual returns to the Hong Kong Companies Registry for three years, violating relevant sections of the Companies Ordinance. The companies also failed to provide a registered office in Hong Kong, violating another section of the Ordinance. The director was found guilty on 12 counts and fined a total of HKD 60,000. |
| Breach of Fiduciary Duties by a Director The High Court of Hong Kong ruled that a director who left their position for a paid financial consultant role, which they created while being a director and ensured the best financial conditions for the role, did not act in the organization’s interests and breached their fiduciary duties. They organized and secured the obligation while being an influential board member, seeking personal gain by creating favorable conditions for their new role, contrary to the organization’s interests. Disclosure of personal interest according to the Articles does not deprive the organization of the right to annul the transaction or demand an account of profits. This case highlights that mere disclosure of interests does not absolve responsibility, and fiduciary duties remain strict even if the director resigns. |
Director’s Liability Under Securities Legislation
Section 32 of the Winding Up and Miscellaneous Provisions Ordinance (WUMP) and Section 571 of the Securities and Futures Ordinance (SFO) impose various obligations on directors of public companies regarding the issuance, handling, and disclosure of securities-related information, including:
- Civil and criminal liability for false statements in the promotion of securities issuance;
- Civil and criminal liability for offenses related to non-market competitive practices under Parts XIII and XIV of the SFO;
- Civil and criminal liability under the SFO for disclosing false or misleading information that induces securities transactions;
- Civil liability for failing to ensure timely disclosure of inside information by listed companies under Part XIVA of the SFO;
- Criminal and civil liability under the SFO for fraudulent or reckless misrepresentation inducing investment in shares or subscriptions;
- Civil liability under the SFO for negligent misrepresentation inducing investment in shares or subscriptions;
- Criminal liability under the SFO for providing false or misleading statements or information to regulatory authorities;
- Civil liability under the SFO for false or misleading public communications;
- Criminal liability under the SFO for failing to properly and timely disclose a director’s interests in shares and debentures of a public company;
- Directors of public companies must comply with Listing Rules requirements regarding securities transactions.
Liability Under Company Insolvency Legislation
In the event of a company’s liquidation, a director bears criminal liability under Sections 271–275 of the WUMP if it is found that they:
- Failed to fulfill obligations imposed during the company’s liquidation;
- Did not deliver relevant property to the liquidator;
- Falsified accounting records for fraud or deception;
- Made any significant omission or false representation regarding the company’s affairs;
- Transferred or concealed the company’s property to deceive creditors;
- Did not maintain accounting records for two years preceding the company’s liquidation;
- Engaged in fraudulent activities.
Fraudulent actions by a director discovered during liquidation may lead to both civil and criminal liability, as well as disqualification. The court may also impose personal liability on a director who intentionally participated in fraud for the company’s debts.
Although Hong Kong does not have a specific concept of undervalue transactions (while personal bankruptcy is possible), liquidators may pursue a director for wrongful actions related to selling assets below market value or may file a claim against the director on behalf of the company for breaching fiduciary duties in approving the transaction.
Liability for Violations and Abuses in Health, Safety, and Environmental Protection
Environmental protection legislation covers a wide range of regulatory measures, including:
- Air pollution control;
- Water pollution control;
- Waste disposal;
- Noise control;
- Ozone layer protection;
- Marine dumping;
- Environmental impact assessment.
Any violation of the aforementioned environmental laws may result in director liability if the offense was committed with the director’s consent or connivance or was related to negligence or inaction.
A company is responsible for the health and safety of its employees under common law and various statutes. Specifically:
- The Occupational Safety and Health Ordinance (Chapter 509 of the Companies Ordinance) imposes obligations on employers or occupiers regarding the health and safety of workers;
- The Factories and Industrial Undertakings Ordinance (Chapter 59) imposes a general statutory duty on employers to ensure the health and safety of persons employed by them in industrial undertakings.
If a company is found guilty of any offense under these ordinances, and the offense was committed with the consent or connivance of any of its directors, or was related to negligence, the director will also be found guilty of the offense.
Liability for Violating Antitrust Legislation
The Competition Ordinance (Chapter 61) introduced a cross-sector competition law regime, effective December 14, 2015. Previously, in January and August 2013, the Competition Commission and Competition Tribunal were established. This law prohibits:
- Anti-competitive agreements and concerted practices, as well as abuse of any substantial market power, aimed at or resulting in preventing, restricting, or distorting competition in Hong Kong;
- Anti-competitive mergers that may lead to a significant reduction in competition in Hong Kong.
A director may be disqualified for up to five years if the company they direct violates competition rules, and the Competition Tribunal finds that the actions demonstrate their unfitness to manage a company.
Other Types of Liability
A director may also be liable in the following cases:
- Deceiving the Hong Kong government in the payment of stamp duty (Stamp Duty Ordinance, Chapter 117);
- Illegal deductions from wages or untimely payment of wages (Employment Ordinance, Chapter 57);
- Unauthorized access to programs or data stored on a computer using other computer equipment (Telecommunications Ordinance, Chapter 106);
- Falsification of computer records (Theft Ordinance, Chapter 210).
If a company is found guilty of any of these offenses and the offense was committed with the consent or connivance of any of its directors, the director will also be guilty of the offense.
Register of Directors in Hong Kong
Companies registered in Hong Kong are required to maintain a Register of Directors. This register is an official list containing information about the company’s directors, including appointment and removal dates. The Register of Directors must be kept at the company’s registered office in Hong Kong. Typically, the register is maintained by the corporate secretary and includes details such as the name, address, appointment date, and removal date of each director. Companies are required to keep this information up to date and promptly report any changes. The Register of Directors is part of the mandatory corporate documents and plays a crucial role in ensuring transparency and accountability in company management.
Frequently Asked Questions (FAQ)
A company director in Hong Kong must be over 18 years old, legally competent, and capable. They must not have any convictions for corporate crimes or be declared bankrupt. Citizenship and residency of the director do not matter.
Yes, there are no residency or citizenship requirements for directors in Hong Kong. This allows non-residents to be appointed as directors and manage the company remotely. A corporate secretary, who must be a Hong Kong resident, assists the director in complying with local laws.
The main duties of a director include compliance with legislation, representing shareholders’ interests, and managing the company’s operational activities.
Appointing a new director involves several key steps: checking the company’s Articles of Association for restrictions, collecting information about the new director, obtaining written consent to take the position, and submitting Form ND2A to the Hong Kong Companies Registry.
A director bears administrative, criminal, and qualification liability for violations. Depending on the severity of the offenses, this may include fines of up to HKD 25,000 for failing to meet reporting or accounting deadlines, criminal liability for fraud, and disqualification from duties for up to 5 years.