Designated Representative vs. Company Secretary in Hong Kong
According to Section 653ZC(1) of the Companies Ordinance, all companies must designate a person as their representative who can assist officers and legal authorities on behalf of the company. Similarly, it is mentioned in Section 474(1) of the Companies Ordinance Cap. 622, every company must appoint a company secretary whose primary job is to ensure that the company is working well with the laws and regulations of Hong Kong. If you want to start a company in Hong Kong, then you must appoint at least one designated representative and a company secretary so that the operations of your company are carried out smoothly.
At first glance, it could seem that both designated representatives and company secretaries have the same job and have nothing different but in reality, they have completely different tasks to do. Startups need to understand the difference between the roles of designated representatives and company secretaries so that they are saved from penalties and misunderstandings with the government. Moreover, if startups understand these two roles in detail, the chances of failure in compliance with laws are reduced significantly. To understand these roles in detail, you must read this article till the end. In this article, we will discuss the qualifications to become a designated representative, the responsibilities of a designated representative in Hong Kong, the role of a company secretary in a Hong Kong company, and the benefits of appointing a company secretary in Hong Kong.
Designated Representative in Hong Kong
Individuals or registrable legal entities who have notable control over the company are known as significant controllers. Hong Kong companies are required to have a designated representative to maintain communication between the authorities and the company. The designated representative and the significant controller don’t need to be different persons or entities. A designated representative has the work of acting as a bridge between the officers or authorities and the company. If you are thinking of appointing the same person or legal entity as your designated representative and significant controller, then you should not worry, as you can appoint a single individual or entity for both roles.
A designated representative ensures that the company’s activities and operations are performed within the laws of the government and that the company complies with the rules and regulations of Hong Kong. A designated representative plays a vital role in maintaining regulatory transparency, accountability, and efficient interaction between the company and regulatory bodies. They help companies simplify regulatory procedures and reduce the chances of compliance failures.
A designated representative has to deal with a wide range of responsibilities for the company. A highly essential work of a designated representative is maintaining the Significant Controllers Register. There are several other duties of a designated representative that assist in the comfortable functioning of the company, which allows the company to be stress-free. The responsibilities of a designated representative include regulatory compliance, record keeping, communication with authorities, reporting and documentation, data protection, risk management, audit support, conflict resolution, keeping track of legal changes, and many more.
Due to all these responsibilities handled by a designated representative, a company can make bold decisions and capitalize on opportunities in the market. It is the responsibility of the designated representative to ensure that the company documents are up to date and the operations of the company are being conducted according to the law. They are responsible for preparing necessary documents and filing them with the authorities concerned. They confirm that the company complies with privacy and data protection laws to safeguard the sensitive information of the company. They also collaborate with the security team and relevant government departments to mitigate the risks related to the operations of the company. One of the most important works of a designated representative is audit support. They make sure that the company is well-prepared and responsive during the time of audits.
The eligibility and qualifications to become a designated representative may differ from industry to industry or location to location but some common elements are needed everywhere. In terms of educational background, a designated representative must have a degree in business finance, law, or any other degree related to the field. It is advantageous to have specialization in regulatory matters, compliance, or any other related domain. Individuals or legal entities that have been involved in compliance, legal, or regulatory procedures in the past are generally preferred by the companies. They are required to have some years of experience in that industry or an industry related to it.
Furthermore, they are also required to have deep knowledge of the industry, its procedures, its operations, and the way a business works in the industry. Designated representatives should have complete proficiency in the laws and regulations related to the industry so that they can ensure that the company complies with the laws of the authorities. Depending upon the jurisdiction, legal qualifications and experience may be required to become a designated representative.
Company Secretary in Hong Kong
The Company Secretary is an exceedingly essential position in a company in Hong Kong. As mentioned above, every company must have a company secretary to deal with the regulatory works of the company. The company is responsible for appointing a company secretary in the company within 6 months of incorporation. A company secretary should be a person who resides in Hong Kong or a legal entity that has a business or a registered office in Hong Kong. A company secretary deals with the statutory and regulatory needs of the company and maintains the statutory records of the company.
A company secretary fosters communication between regulatory authorities and the company and makes sure that the company complies with the laws of the Companies Ordinance. The company secretary also ensures that the company files the statutory documents with the Companies Registry. A company secretary has a multitude of tasks in a company, including preparation for board meetings, facilitating communications between the board of directors and shareholders, advising board members on corporate governance and implementing governance procedures, maintaining and updating the registers of directors, members, and significant controllers, handling the shareholders and solving their queries, reviewing and updating the policies of the company and offering training to employees and directors.
Appointing a qualified and knowledgeable person or an entity as a company secretary can prove to be highly beneficial for your company. A qualified company secretary offers various benefits to the company and creates better possibilities for growth and success. Having a qualified company secretary in your company means you can better capitalize on the market trends and be aware of the risks beforehand. Some essential benefits of having a knowledgeable company secretary include better adaptability to the changing environment, legal compliance, implementation of good governance practices in the company, and availability of useful guidance and expert advice on legal and governance matters.
Appointment of a qualified company secretary is also valuable for the efficient use of resources without spending much money, building strong relationships between the shareholders and boards of directors, strengthening ties with shareholders, updated maintenance of the records, and better management of the documents. Furthermore, a qualified company secretary has promising knowledge of the industry and its risks. Therefore, if you appoint a qualified company secretary in your company, you can be alerted of the coming risks, avoid those risks, and save your company from losses. A qualified company secretary is also helpful in improving the image of a company and portrays a professional image of the company in the eyes of potential investors and shareholders.
Designated Representative vs Company Secretary in Hong Kong
| Aspect | Designated Representative | Company Secretary |
|---|---|---|
| Definition | An individual or a legal entity that represents the company in front of the regulatory bodies and legal authorities. | A company secretary is a person or a business who has a residence or a registered office respectively in Hong Kong and manages various chores for the company. |
| Primary Role | Ensuring that the company works with the laws and regulations of the authorities and maintains an up-to-date controllers register. | A company secretary has the primary job of overseeing corporate governance and administrative functions. |
| Regulatory Focus | The primary focus of the designated representatives is on regulatory compliance. | Their focus is on both regulatory compliance and corporate governance. |
| Specific Requirements | Section 653ZC(1) mandates the appointment of a designated representative for the company. | According to Section 474(1) of Company Ordinance Cap. 622, every company must appoint a company secretary within 6 months of incorporation. |
| Legal Background | A designated representative may or may not have a legal background but should have knowledge about the legalities of Hong Kong. | To be a company secretary in Hong Kong, you might need a legal or business background with experience and legal knowledge. |
Why choose Company Secretary Services from Startupr?
Both designated representatives and company secretaries are important parts of a company and play crucial roles in its expansion and success. Both positions are essential for the company and contribute towards the smooth functioning of the business. A detailed description of designated representatives and company secretaries has been provided in the above article. In addition, the requirements to become a designated representative, the designated representative responsibilities, the benefits of appointing a qualified company secretary, and many other aspects of both positions are discussed in detail.
If you are in search of trusted company secretary services in Hong Kong, then you may not find anyone better than Startupr. Startupr can provide you with numerous facilities, including company secretary services, company incorporation, mail forwarding, accounting, tax services, virtual offices, and many more. The company secretary services offered by Startupr can assist you in complying with the laws of Hong Kong and can save you from legal charges and penalties. Startupr has thousands of satisfied customers who trusted Startupr and got the desired results.