Almost every company incorporated in Hong Kong must keep a Significant Controllers Register (SCR), a record of the people and entities who ultimately own or control it. The register is kept by the company itself, not filed with the Companies Registry, but it must be available to law enforcement officers on demand.
A significant controller is anyone who, directly or indirectly, holds more than 25% of the shares or voting rights, can appoint or remove a majority of the board, or otherwise exercises significant influence or control. Failure to comply is an offence punishable by a fine of up to HK$25,000 plus HK$700 for each day the default continues.
At a glance
- Who must keep one?
- Every Hong Kong-incorporated and re-domiciled company, except listed companies
- Filed with the Companies Registry?
- No, it is kept by the company
- Where is it kept?
- At the registered office or another place in Hong Kong notified to the Registry (Form NR2)
- Who can inspect it?
- Specified law enforcement agencies, on demand; it is not a public register
- Must it be updated?
- Yes, within 7 days of the company confirming the relevant particulars
- Can it be left blank?
- No, if there is no significant controller, the register must say so
Who is a significant controller
A person or entity is a significant controller if any one of these conditions applies:
| Condition | In practice |
|---|---|
| More than 25% of the issued shares, held directly or indirectly | Includes shares held through other companies, nominees or arrangements |
| More than 25% of the voting rights, directly or indirectly | Relevant where share classes carry different votes |
| The right to appoint or remove a majority of the board | May come from the articles or a shareholders' agreement |
| The right to exercise, or actual exercise of, significant influence or control | For example, a founder who directs the company without holding shares |
| Control over a trust or firm that itself meets any of the above | Trustees and those who control the trust or partnership |
- Registrable person: a natural person who is a significant controller. Their particulars must be entered.
- Registrable legal entity: a company or other legal entity that is a member of the company and is itself a significant controller. It is entered too, and you must keep tracing upward to find the individuals behind it.
How to build and maintain the register
| Step | What happens |
|---|---|
| 1. Review | Check the register of members, articles of association, shareholders' agreements and any trust or nominee arrangements. |
| 2. Send notices | Give written notice to anyone you know or have reasonable cause to believe is a significant controller, and to others likely to know their identity. |
| 3. Allow time to respond | The recipient has 1 month to respond. If there is no reply, the company records that fact in the register. |
| 4. Confirm and enter | Once the particulars are confirmed, enter them in the register within 7 days. |
| 5. Appoint a designated representative | Record their details in the register. |
| 6. Keep it current | Update the register whenever ownership or control changes, for example after a share transfer or a new shareholders' agreement. |
For individuals the register records name, correspondence address, identity document number, the date they became a significant controller and the nature of their control. For legal entities it records name, company number, registered office, legal form, governing law, the date it became registrable and the nature of its control. Where particulars cannot be confirmed, the register records the steps taken and what is outstanding.
The designated representative
Every company must designate at least one person to provide assistance relating to the register to law enforcement officers. The designated representative must be either:
- a member, director or employee of the company who is a natural person resident in Hong Kong; or
- an accounting professional, a legal professional, or a person licensed as a Trust or Company Service Provider.
Most companies with overseas directors appoint their licensed company secretary as designated representative.
Penalties and common mistakes
| Common mistake | What to do instead |
|---|---|
| Leaving the register blank because "the shareholders are obvious" | Enter every significant controller, or record that there is none |
| Stopping at a corporate shareholder | Trace through to the individuals who ultimately control it |
| Not updating after a share transfer | Review the register as part of every change in ownership |
| No designated representative | Appoint one and record their details |
| Keeping the register outside Hong Kong | Keep it at the registered office or a notified place in Hong Kong |
- Mapping your ownership chain and identifying significant controllers.
- Preparing and sending the required notices and recording responses.
- Keeping the register at our office as your registered office, and acting as designated representative as a licensed TCSP.
- Reviewing the register whenever shares change hands, as part of our company secretarial service.
In summary
- Keep an SCR from incorporation; it is not filed but must be produced on demand.
- "More than 25%", directly or indirectly, or control by other means makes someone a significant controller.
- Appoint a designated representative and update the register within 7 days of any confirmed change.
Official references
- Companies Ordinance (Cap. 622), Part 12, Division 2A and Schedule 5A
- Companies Registry: Guideline and FAQs on the Significant Controllers Register, www.cr.gov.hk