Suppose you are looking to start a business in Hong Kong. In that case, the Hong Kong Companies Ordinance (Companies Act) is an official document that sets out the scope and limits of how businesses can function and operate within Hong Kong.
If you have a company or are looking into starting one in Hong Kong then it is essential to understand and find out what their Company Law is all about.
For a long time, Hong Kong has been known to have a pro-business environment that caters well to all types of traders, companies, and businesses. The government has played a big part in helping local businesses grow and attracting investors from the international market.
What is the purpose of the Hong Kong Companies Ordinance?
With the new Hong Kong Companies Ordinance, the government wants to focus on enhancing the country’s corporate governance, giving companies within Hong Kong better regulation, keeping a better watch on the country’s business environment, and modernizing the business laws to make them fit today’s business world better.
The new Hong Kong Company Law enables the country to keep up and be on the same framework development regarding the standing of international businesses. The new law also makes Hong Kong an excellent country for entrepreneurs with the company’s Ordinance enhancing the country’s business status internationally.
Companies that are in Hong Kong, as well as foreign companies that are registered in Hong Kong, are required to follow the Companies Ordinance which would also include any newly incorporated companies.
Old Companies Ordinance VS New Companies Ordinance
On March 3, 2014, Hong Kong’s old Companies Ordinance (Cap. 32), which had existed for more than 50 years, was updated to the latest Companies Ordinance (Cap. 622) around Hong Kong.
This updated Company Ordinance went into effect throughout the middle of the year 2006. The new Companies Ordinance is a thorough revision of the previous Corporation Act that aims to modernize Hong Kong’s enterprise legislation and strengthen Hong Kong’s position as a significant global financial and commercial hub.
In contrast to the old Companies Ordinance, this revised Companies Ordinance has been structured using ‘clear and straightforward English,” making it easier for its readers, such as directors, board committees, and accountants, to understand its requirements.
Thousands of pages worth of criteria are inside this new Companies Ordinance. Comprehensive answers are provided through its 921 parts and 11 tables, which address a wide range of topics covering business formation and registration, common shares the compilation of accounting records and executives’ reports, auditing, and more.
What is the New Inspection Regime?
The main benefit of this new inspection regime is the elimination of unrestricted open access to the URA for shareholders, and the complete IDN of the respective business officials included within the Corporations Registry.
Just the corresponding addresses of every director, as well as the partial IDNS of boards, corporate executives, and some other key personnel and individuals would be made freely available to the public scrutiny inside the new system across all papers that are present to the Corporations Registry.
Having the exception of some situations, in which such disclaimer by the CR would be permitted with a judicial order or even under segment 58(3) of the Corporations Act the URA, as well as the full IDN among those people, would only be obtainable to disparate factions of officials or personnel as prescribed under section 12(1) of the Company (Residential Addresses and IDN) Rules (“CERAIN)A) (Cap. 622).
The second phase of this new structure or arrangement will begin on October 24, 2022. and the following section will go through the specifics of the most important modifications.
The overview of the New Inspection Regime, Phase II
The Directory for Directors inside the Corporations Registry may no longer include any personally identifiable data and Information but instead provide correspondence addresses as well as limited IDN for open and public access.
The director’s residence address will no longer be used as the notifying address; instead, they will use the director’s communication address information, as per Company Registry Extemal Circular No.3/2022 as well as C(RAIN), commencing with the start of Phase II.
In the event that a director’s intended corresponding address differs from the applied or registered office of the business, the board will be required to inform the Registry of such change of address within 15 days just after the arrangement’s effective date.
When no request is approved by the date described above, they would substitute the firm’s registered business address for the individual’s communication address. Only designated people will be willing to qualify for the Registry once the change is made in order to get access to that confidential data.
Once Phase II has begun, who can qualify the Corporations Registry to grant access to the Confidential Information?
Those who fall within the definition of specified people under section 12(1) of the C(RAIN) must fulfil one of the following:
- the data subject
- a third party who has been given explicit written permission by such a data subject to access the information and data
- One member of the organization
- authorized liquidator
- A trustee in insolvency
- a public official or entity
- an individual included within the Regulation’s Schedules
- a solicitor or international attorney who works for a law company
- a CPA, licensed public (practicing)
- a bank or other financial institution; some other enterprises and occupations
- CW assistance in the implementation of the New Inspections Regulation Phase II
Clients who need assistance updating their legal business and communication addresses may turn to CW. Our company secretarial experts can provide you with further information on the latest inspection regime as well as suggestions on how to achieve adherence.
The third phase will start on December 27, 2023.
People whose URAs and complete IDNs appear throughout legal filings with the Company Registry prior to the implementation of the new inspection regime can apply to the Company Registry to have one’s Secured Information redacted from those records and replaced with one’s correspondence data and addresses as well as provisional IDNs.
In a repeat of phase 2. authorized individuals may submit an application to the Registry requesting access to company directors’ and others’ Private Data and Information.
The personal details and information of business directors, as well as other pertinent persons who are listed upon that Company Registry will get more security thanks to Hong Kong’s new company inspection framework.
When data subjects as well as Hong Kong-registered enterprises wish to comply with the new company regime’s standards and keep their Private data and Information private, they must get in touch with the respective service providers to change all relevant confidential info and submit the necessary paperwork.
How Can We Help?
Do you want to establish a business but have no idea where to begin? SJH Global offers simple and straightforward company registration services to help you get your business up and running in no time. We also offer personalized consultations to help you with any concerns or questions you might have about starting your own company.
We understand that registering your company can be a tedious and difficult process, so we aim to simplify this for you. We ensure you have all the necessary documents before providing the final sign-off and registration service.