With regards to ‘how much to register a company in Hong Kong‘ can differ greatly depending on where you go and what your needs are, but before creating a company in Hong Kong it would be good to understand the following with regards Share Capital.
A share capital is the worth or amount of the shares a company issues to its shareholders. Companies having a share capital includes all those companies which allot such shares. These companies are governed by regulations relating to its shares and the rights attached to these shares i.e. the rights of the shareholders. These laws or regulations are important for both company and shareholders before or after to create company in Hong Kong, so that they are able to avoid hefty fines and to protect their rights.
Note that these regulations consider every share class with ‘uniform rights’ as the same class, and rights given to shareholders through this section are the same for shareholders who does not carry the same rights to dividends in the 12-month period after their share allotment. The rights attached to shares means the rights of the shareholders.
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Share Classes description for protection of prospective shareholders
These laws protect people from buying shares without being aware of the share rights of the specific share class.
This one is exclusively for companies having more than one share class. The share certificate should be in a prominent position, that the company has multiple share classes and it should also specify the voting rights attached for each share class.
These rules are specifically for companies having shares whose shareholders are not entitled to no voting rights. In this case the descriptive title of the share must include the words ‘non-voting’. ‘non-voting’ should also appear distinctly on any share certificate this company issues.
Further, companies should be especially careful in regards to the description of share classes for in case of breach of these laws the company and all of its responsible persons will be held accountable for this trespass. The company and all of its responsible persons will each be charged a fine of Level 4 and in the case this offence was continued they will be liable to a further fine of $700 for each day this was continued.
Varying Class Rights for protection of existing shareholders
If the company has provisions in its articles for changing a class rights, then they are not subject to these laws as long as it is done in accordance with their company articles. Otherwise, they need the consent of shareholder of the class affected by the change of class rights. This consent should either be in the form of written consent of at least 75% of the voting shareholders of that class or in the form of a resolution passed for sanctioning the variation at a general meeting of shareholders of the class.
The variation takes effect if no application is filed to court in the specified time of within 28 days of variation. The change also comes into effect once an objection that was filed within the allocated time period but is either withdrawn or determined as not disallowed.
It is important to note that any amendment or insertion in company articles regarding rights attached to shares is also regarded as variation of class rights and, thus change in these also requires the company to go through the same procedure.
It is made sure that shareholders are given a chance to apply against variation in class rights by introducing rules about notification to shareholders. In case of variance of class rights each effected shareholder is entitled to be given a written notice by the company of the change within 14 days of variation. Failing to ensure this will be considered an offence by the company and the responsible people and they will be liable to fine of level 4 and a further $700 for each day of continued offence.
Confirmation of variation by court
The rules confirming the application against variance say that at least 10% of the affected shareholders must apply together to court for variation to be disallowed. This application must be made within the deadline of 28 days after variation. The application may be written by any one or more of the members entitled to apply on the behalf of the affected shareholders.
The applicant or any other interested person is entitled to be informed on an application. The court may disallow the amendment if it is found to unfairly prejudice the applicants.
Submission of Court Order to Registrar
The order made by the court whether disallowance or confirmation of the modification of the rights attached to the shares must be submitted to the registrar by the company within 15 days of order. In failing to fulfill this, the organization and its responsible persons will be fined with a level 4 and in case of repeated offence there will be an added sum of $700 each per day of persistence.
Notifying Registrar of Variation
Any alteration in the rights of the shareholders must be submitted to the registrar within a month of the change taking effect in order to register the variation. These submissions must include a copy of the resolution or any other document that certified the alteration and a notice in the specified form including a statement of capital of the day the variation took place. In failure to meet these regulations, the company and responsible persons will be liable to a fine of level 4 and on persistence of this contravention each will be fined $700 for each day of continued offence.
In effect, these laws enforce protection for shareholders both prospective and existing from the company. The existing shareholders are protected from variation of rights attached to shares without their consent and the prospective shareholders from buying shares unawares of the details by hefty fines for the company. Also the company is protected from being unable to vary class share rights by the specification of at least 10% shareholders’ disagreement. The deadline of 28 days for submission of application against variation in shareholder rights, also preserves the company from being excessively delayed or unnecessarily harried.
There are many companies out there that can help with a company registration in Hong Kong, but as to how much it costs to register a company in Hong Kong can vary depending on where you go. It is always a good idea to check out their websites and find the fees pages and the information as to what these fees cover. You will see immediately how much it costs to register a company in Hong Kong with that company and what the fees are for.
