From 1 March 2018, all Hong Kong incorporated companies, except for those companies that are listed on the Hong Kong Stock Exchange, are required to maintain a Register of Significant Controllers (the ‘SCR’), which will be accessible to the persons whose names are entered in the register or on demand by any law enforcement officer.
Even if a company does not have a significant controller, the company is still required to keep the Significant Controller Registry. The regime does not apply to any non-Hong Kong incorporated companies, even if they are registered as a Part 16 non-Hong Kong companies under the Companies Ordinance (Cap. 622 of the Laws of Hong Kong) (the Companies Ordinance).
A significant controller of a company includes:
A natural person that has significant control over the company.
A legal entity that is a member of the company and has significant control over the company.
A person has significant control of a company directly or indirectly holds:
- more than 25% of the shares
- more than 25% of the voting rights in the company
- the right to appoint or remove a majority of the company’s board of directors.
- has significant influence or control over the company.
- has significant influence or control over the activities of a trust or firm which is not a legal person, but whose trustees or members meet one or more of the conditions specified above.
In order to identify the Significant Controllers, the companies should:
- reviewing all documents and information readily available (such as the company’s register of members, articles of association, shareholder agreements, or other relevant covenants or agreements),
- considering interests held by individuals, legal entities, trusts or firms, considering any evidence of joint arrangements, and any other actions that the company may have to take depending on that company’s circumstances.
Once the Company has identified its Significant Controllers, the Company must enter the required Significant Controller Registry particulars in the register within 7 days after the details have been confirmed. Significant Controller Registry can not be left blank. Director(s), Shareholder(s) and Owner(s) of the Companies must inform/ update the Company Secretary with details, in order for the Company Secretary to assist to file and / or keep records of the Signifiant Controller Registry.