Unlike in the UK, limited companies in Hong Kong are required by law to have at least one company secretary. You can choose to hire either an individual or a company to be in that position when you set up a company in Hong Kong. The company secretary also needs to be a Hong Kong resident or belong to a Hong Kong company. A company can also appoint their director as the company secretary, but if a company only has one director then that sole director cannot be appointed as the company secretary. A “company secretary” is not a “secretary” in the usual sense of the word. There are four benefits of hiring a service company as your company secretary rather than just asking your friends or family to fill the position.
#1 Legally compliant
A company secretary is responsible for making sure a company complies with its statutory duties. They will keep directors and shareholders of the company informed of their legal responsibilities. They also ensure that documents relating to the statutory administration of the company are up to date and correct. However, even if you have a company secretary the directors are still accountable for any wrongdoing of the company. Make sure you still know what is going on and don’t rely on the company secretary for everything.
#2 Avoid late submissions
Every year each company has to submit an annual return to the Companies Registry. If the annual return of a private company is submitted late then they could be fined for as much as HK$3,375. Submitting a profits tax return and an employer’s tax return to the Inland Revenue Department is also a legal requirement. Submitting these late will incur a heavy fine too. The company secretary will always remind you to submit those returns on time. Therefore, the chance of submitting them late is minimal. These fines are mostly more than the service fee you would pay to the company secretary, making them cost effective too.
#3 Reliable and trustworthy
A company secretary is an officer of the company and is able to sign very important documents on behalf of the company. Using a service company as your company secretary is the best way to guarantee that your secretary is reliable and trustworthy. This is especially true if your Hong Kong company operates as an offshore company in which case your company secretary will always act as you instruct them. This way you ensure your company is never put at risk.
#4 Immediate administrative help
When you hire a service company as a company secretary they often offer administrative services too. If you need administrative tasks to be done in a hurry, such as payroll or a virtual secretary, then they will always be your dependable partner that is there when you need them. Hiring a service company as your company secretary saves you the hassle of looking for administrative help.
These are the four main benefits of hiring a company secretary company when starting a company in Hong Kong. What do you think? Share your experience in the comments box below.