Incorporation or company incorporation Hong Kong refers to the creation of companies and companies can be formed following the process of registration under the Companies Ordinance (cap.622) and registration is the process you follow with regards to how to set up a company in Hong Kong, to let incorporations come into existence.
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Procedure of Registration
Procedure to obtain registration or related to how to set up a company in Hong Kong is laid out in pt.3 section 67 of Companies Ordinance (Cap.622). This clause states that, “any person or many can form a company by signing on the articles of association of the incorporation, provided it is meant for lawful purpose”, after which it is sent to registrar along with copy of articles and registration form, for the registration of incorporation.
Articles of Association
Under Cap.622, Article of association is the single constitutional document, or the memorandum that now have been ended.
Previously along with article of association, memorandum of association was also needed, but following the examples of Australia and United Kingdom where you just need a single constitutional document thus easing the process of how to set up a company in Hong Kong Cap.622 thus abolished the concept of dual paperwork and now incorporations just needs to have; company’s constitution consisting of only the article of association. The abolishment of Memorandum of Association has now simplified the process of how to set up a company in Hong Kong. Following are some of the mandatory constituents of this document:
Basic Information:
There is certain basic information about the company that needs to be mentioned and all new companies registered under Cap.622 must have registered articles of association.
Compulsory Requirements:
Requirements differ depending on the operations and domain of the company, however common types of company and companies limited by shares must have these provisions:
- The Company Name.
- Nature of limited Responsibilities.
- Information about company’s initial shareholdings like, total numbers of shares to be issued, shares capital on company’s formation, total paid and unpaid amounts on the shares issued on formation, the number of shares each founding member holds and each founding members shares capital.
Objectives:
Before February 1997, it was mandatory for companies to have their objectives mentioned in the memorandum and articles of association but following the amendment in Company’s Ordinance back in 1997, Cap.622 now differentiates this, now under Cap.622 “Objective clause is optional for all companies, provided they are not charitable or any other company which seeks to omit the word “Limited” from their names”, for such companies, Objective clause is mandatory.
Capital Clause:
Cap.622 abolished the concept of memorandum where concept of authorised share capital and nominal or par value of share was obligatory, thus now prevailing requirements no longer needs Capital Clause.
Regulations Setting:
Cap.622 does not bounds the companies to adopt standard articles, companies are now independent to either draft their own regulations or to adopt model articles. Under cap.622. Model Articles contains three sets of model articles; for Private Companies limited by shares, Public Companies limited by shares and companies limited by guarantee. Companies can adopt any of these three sets to which they feel best refers to their purposes and circumstances otherwise they are independent to draft their own too.
Miscellaneous:
- Language can either be English or Chinese.
- Paragraph division with consecutive numbering.
- Must be signed by each founding member.
Incorporation Form
Under Cap.622 Section 67(1)(b) incorporation form is mandatory and must include:
- Name of the Company
- Type of Company
- Address of the registered office
- Details of the founding members
- Details of the nominated Directors
- Company Secretary
- Detail of share capital
This form must be signed by any one of the founding member, member deem to bear the directorship must submit declaration stating his or her consent to be director and having attained the age of 18 years, even if the signatory is also, a director to be. All this could be incorporated into Incorporation form or separate form could also be attached and must be delivered to the Registrar office within 15 days of incorporation.
Statement of Compliance:
It is the declaration stating that all the requirements of ordinance with respect to registration of the incorporation have been compiled and all the particulars and provided information is correct and accurate and in lieu of company’s article.
Electronic applications for registration
Unlike previous practices, since 2011 it is now possible to submit incorporation form and copy of articles of association online instead of going to the Companies Registry. For this purpose, Companies Registry has created 24-hour portal called “e-Registry” where submission of documents along with checklist and requirements, is available to facilitate the process and aspirants.
Shelf Companies
Instead of going through all this process, one can acquire “Shell Companies” normally refers to the “Ready Made Companies”. These are the companies accountants, solicitors or other corporate service providers have already incorporated but serves no purpose and are idle. One can have this instead of incorporating a new one with just a nominal amount of share capital. Apart from this, Corporate Service Providers can also help clients in managing these:
- Transfer of shares to the company.
- Appointment of new directors and secretary instead of existing nominee director and secretary.
- Change of Company name.
- Change of registered office address.
e-Registry versus Shelf Companies
In the future shelf companies would not have much scope as they had in past because with the introduction of e-Registry, process of incorporation registry have been speeded up and thus process is not that much troublesome for which aspirant would look for shelf companies.
Post Registration
Registration:
As the documents reach registrar office, it takes about 4 days to process delivered applications and issuance of registration. While for online submitted applications, it takes just an hour to issue registration.
Certificate of Registration:
Upon the registration, Registrar office issues a Certificate of Incorporation under chap.622 section 71, from the date mentioned on the certificate, company comes into existence and this certification is an authentication that company has met all the requirement of Ordinance and is now formed to operate.
