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The Companies (Amendment) Ordinance 2018 requires non-listed Hong Kong companies to keep a “significant controllers register” (SCR), and comes into effect on 1st March 2018.
A “significant controller” is a person or entity who:
Company’s obligation to serve notices and to notify Companies Registry
Every Hong Kong company has the obligation to identify all “significant controllers”, and to keep the SCR up-to-date by entering the particulars of all “significant controllers” and their nature of control in the SCR.
If a Hong Kong company knows, or has reasonable cause to believe, that a person or entity is a “significant controller” or that person or entity knows the identity of another “significant controller”, the company has an obligation to serve a notice on such person/entity within 7 days.
The person/entity on receiving the notice then has to respond to the notice advising if it is a “significant controller”, and if so confirm its particulars as stated in the notice and providing any missing particulars. The person/entity also has to advise if it knows the identity of another “significant controller”, all known particulars of that other “significant controller”.
For a Hong Kong company held by another company, or held by several companies in the same “chain of ownership”, “significant controllers” would include the immediate holding company of the Hong Kong company and the person/entity at the end of the “chain of ownership”.
The company should also serve a notice on a “significant controller” if the company knows, or has reasonable cause to believe, that the particulars of that “significant controller” have changed, or if it has ceased to be a “significant controller”.
The company also has an obligation to notify Companies Registry where the SCR is kept.
Failure to comply with the above obligations is an offence which attracts a level 4 fine (HK$25,000) and where applicable, a further HK$700 for each day the offence continues.
Law enforcement officers from various authorities, including Companies Registry, Customs and Excise Department, Hong Kong Monetary Authority and the Hong Kong Police Force, can require the company to make its SCR available to them for inspection, and to make copies of the SCR.
Additionally, any “significant controller” whose name is on the SCR also has the right to inspect the SCR.