4 Points for Attention AFTER Company Formation

4 Points for Attention AFTER Company Formation

As soon as your company is successfully  registered, please do not forget to submit various documents (e.g. Minutes of Annual General Meeting and Annual Return etc.) in yearly basis. 
Companies which have failed to deliver or are late in delivering their filing requirements within the prescribed time periods will be imposed a fine.

For compliance and advisory concerns, first year of basic Company Secretarial Service will be provided by most of the accounting firms or corporate service providers along with company formation.

In fact, they are experienced in handling the Companies Registry related documents, such as: reporting the changes of corporate structure, shareholders and directors, preparing and submitting Annual Return, drawing up Board Meeting Agenda and organizing Annual General Meeting etc.

Bank Account Opening

Most of the banks in Hong Kong have their own minimum deposit amount requirements.
To prevent international criminal organizations conducting money laundering via banking system, banks may request their clients disclosing beneficiaries’ personal information, such as: identity and nationality etc.

By considering certain documents are essential to apply banking service, applicants are being reminded for completing their business registration and company registration before conducting their bank account applications.

During the application, many enquiries towards business nature and source of capital etc. may be raised by bank. Supporting documents, moreover, are being required in most of the time.  Company Secretary will assist clients for documentation, while Directors will prepare personal document on their own. A majority of banks request clients submitting their applications in person for the purpose of identification.

Obviously, application process can be accelerated under broker referral. Company Secretary may assist for dealing with those complicated process and time saving, as they always having good business relationship with brokers.

Annual General Meeting (AGM)

Purposes of Annual General Meeting are: Accounts & Auditing, Dividend Discussion and Critical Decisions Making.

According to Companies Ordinance, a company must hold its AGM within 18 months after the first anniversary of the company’s incorporation, and retain the practice in respect of each financial year of the company.

  • In the case of a company limited by guarantee or a private company that is not a subsidiary of a public company, AGM must hold 9 months after the first anniversary of the company’s incorporation.
  • In the case of any other company, AGM must hold 6 months after the first anniversary of the company’s incorporation.

Annual Return (NAR1)

The annual registration fee payable on delivery of an annual return of a private company is HK$105 if it is delivered within 42 days after the most recent anniversary of the date of its incorporation.

Substantially higher registration fees are payable if the annual return is not delivered within the prescribed 42 days time limit.

It is the responsibility of the director(s) and company secretary of a company to observe the requirements of the Companies Ordinance to deliver annual returns and other statutory documents for registration within prescribed time periods.

Companies Registry will not issue a notification for annual return delivery. Directors are responsible to deliver Annual Returns on time, and a penalty for the ceiling fine HK$1,000 per day with maximum fine on HK$50,000 will be imposed.

In general practice, corporate secretarial service providers will notify their clients for the annual return submission one month in advance  Avoidable cost, therefore, can be saved.

Employee Tax Obligations

According to the law, company has to file one copy of form IR56E (namely “Notification by an employer of an employee who commences to be employed”) to Inland Revenue Department within 3 months of employing a person (including Director(s)) if the employee is likely to be chargeable to Salaries Tax.  Particulars such as: full name, residential address, employment start date and terms of employment are required.

Besides, Inland Revenue Department issues the form IR56B (namely “Employer’s Return of Remuneration and Pensions”) to employers in April every year.  The Form is due to be submitted to the Department within one month.

Please contact us for gathering further information on company registration.