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SIGNIFICANT CONTROLLERS REGISTER (“SCR”)

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.

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Failure to comply with the consequences of keeping a register of significant controller?

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Failure to comply with the above obligations is acriminal offence. The company and every responsible person of the company are liable to a fine at level 4 (i.e. $25,000). Where applicable, there is a further daily fine of $700.

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Law Enforcement Officer:

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  • 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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Who is a significant controller of a company

 

  • a registrable person who is a natural person and e.g. a company, which is a shareholder of the company that has significant control over the company

  • 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 should a company do to identify significant controllers?

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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

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  • 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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What is a Designated Representative？

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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.

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A company’s designated representative must be either:

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  •  a shareholder, director or an employee of the company who is a natural person resident in Hong Kong or, 

  •  an accounting professional,

  • a legal professional

  • a person licensed to carry on a business as trust or company service provider -PSH Com Sec Limited (Licence no.: TC000440)

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