Form NSC23 Return of Cancellation of Treasury Shares Hong Kong
Use Form NSC23 to formally record the cancellation of treasury shares and the corresponding reduction of share capital in Hong Kong.
NSC23 at a glance
- Official title
- Return of Cancellation of Treasury Shares
- Issued by
- Companies Registry
We link the issuing authority's own index rather than hosting a copy, because the form is revised there and an out-of-date copy is worse than none.
Form NSC23 Hong Kong: Return of Cancellation of Treasury Shares
A Hong Kong company cancelling treasury shares must report the transaction to the Companies Registry on Form NSC23. This form, officially titled "Return of Cancellation of Treasury Shares", records the reduction in share capital. The filing completes the statutory process for extinguishing shares held in treasury after a buy-back or redemption.
Cancellation of Treasury Shares Hong Kong
Treasury shares are shares a company has bought back or redeemed but not yet cancelled. While held in treasury, these shares carry no voting, dividend or return-of-capital rights on winding-up. The company may hold them before deciding to sell or cancel them. Cancelling extinguishes the shares and reduces the company's issued share capital by the cancelled shares' nominal value.
The cancellation of treasury shares is governed by Part 5 of the Companies Ordinance (Cap. 622). Directors must resolve to cancel the shares. The company must then file Form NSC23 with the Companies Registry within the prescribed period to give public notice of the capital reduction.
NSC23 Form Guide
Form NSC23 is a specified form under the Companies Ordinance. The form requires the company to provide its name and company number, the date the cancellation took effect, the number and class of shares cancelled, and the aggregate nominal value of the cancelled shares. You must also state the amount, if any, paid by the company to the shareholder on the original buy-back or redemption, and confirm the shares were held as treasury shares.
A director, the company secretary, or a board-authorised person must sign the form. Keep a certified true copy of the directors' resolution authorising the cancellation with the company records. It is not filed with the Registry unless requested. The filing fee for Form NSC23 is HK$105 for on-time submission. The fee is the same for paper or e-Services portal filing.
Treasury Share Cancellation Companies Registry
The Companies Registry processes Form NSC23 and updates the public register to reflect the cancellation. Once registered, the company's issued share capital is reduced accordingly. The public record shows the reduced share capital figure, and subsequent searches of the company's records will reveal the cancellation.
The cancellation of treasury shares is a separate step from the original buy-back or redemption. The buy-back is reported on Form NSC2 (Return of Share Redemption or Buy-back). Cancellation is a distinct event reported on Form NSC23 even if the shares are cancelled immediately after the buy-back.
Special Resolution Requirements
A special resolution is not required for the cancellation of treasury shares. Section 162 of the Companies Ordinance (Cap. 622) gives directors the power to cancel treasury shares, and a simple board resolution is sufficient. However, a special resolution is required for the original buy-back or redemption of shares unless the company's articles provide otherwise. Shareholder approval is obtained before the shares are acquired, not at cancellation.
If cancellation leaves the company with no shares of a particular class, directors should consider whether the company's share capital structure requires consequential amendments to the articles of association.
Particulars of Cancellation
Particulars of cancellation must be accurate as at the date of cancellation. The return date on Form NSC23 is the date directors resolved to cancel the shares, or the effective date specified in the resolution. The form requires the exact number of shares cancelled and the date the cancellation took effect.
If cancelling more than one class of shares, the form must provide separate particulars for each class. The company must also confirm the shares being cancelled were held as treasury shares immediately before cancellation.
Date of Cancellation and Filing Deadline
File Form NSC23 with the Companies Registry within 15 days after the date of cancellation. The date of cancellation is the date directors resolved to cancel the shares, unless the resolution specifies a later effective date. If the 15th day falls on a day the Companies Registry is closed, the filing deadline is the next business day.
Late filing attracts a higher registration fee. The fee is HK$870 if the form is delivered more than 15 days but within 3 months of the cancellation date. It rises to HK$1,740 if delivered between 3 and 6 months late, HK$2,610 if delivered between 6 and 9 months late, and HK$3,480 if delivered more than 9 months late. The company and every responsible person (director, secretary or manager) may also be liable to prosecution for default.
Share Capital Reduction Effect
Cancelling treasury shares is a form of share capital reduction. The company's issued share capital is reduced by the nominal value of the cancelled shares. If a company buys back 10,000 shares of HK$1 each and cancels them, the issued share capital is reduced by HK$10,000. The reduction is automatic upon cancellation; no court approval or shareholder resolution is required when effected through treasury share cancellation.
The reduction in share capital is recorded on the company's balance sheet as a reduction in the share capital account. The amount paid for the shares (the buy-back consideration) is typically charged to the company's distributable profits or a share premium account.
Certified True Copy Requirements
While Form NSC23 is filed with the Companies Registry, retain a certified true copy of the directors' resolution authorising the cancellation. A director or the company secretary should certify the resolution and keep it in the company's minute book. The Companies Registry may request a copy of this resolution during a compliance inspection or if there is doubt about the filing's validity.
The company's register of members must also be updated to reflect the cancellation. The cancelled shares are no longer in issue, and the register should show the reduced number of issued shares.
Filing on the E-Services Portal
File Form NSC23 electronically through the Companies Registry's e-Services portal (www.eregistry.gov.hk). The electronic process requires completing the form online, attaching any necessary supporting documents, and paying the registration fee by credit card or through a registered account. The portal allows immediate filing and generates a receipt and an acknowledgement of registration.
Paper filings are also accepted. Deliver the completed and signed Form NSC23, with the appropriate fee, to the Companies Registry at 14/F, Queensway Government Offices, 66 Queensway, Hong Kong.
Relationship with Other Forms
Form NSC23 is the final step in the lifecycle of treasury shares. The preceding steps are:
- Share buy-back or redemption: Reported on Form NSC2 (Return of Share Redemption or Buy-back) within 15 days of the buy-back.
- Holding period: The shares may be held as treasury shares for any period, subject to the company's articles and any applicable restrictions.
- Cancellation: Reported on Form NSC23 within 15 days of the cancellation.
If the company sells treasury shares instead of cancelling them, file Form NSC22 (Return of Sale or Transfer of Treasury Shares).
For share capital reductions not involving treasury shares, such as a reduction confirmed by the court, use Form NSC20 (Return of Share Capital Reduction Confirmed by Court) or Form NSC19 (Return of Share Capital Reduction Supported by Solvency Statement).
The Companies Registry's specified forms index at www.cr.gov.hk/en/forms/specified.htm provides the current versions of all share capital forms, including Form NSC23. Always use the latest version from that page, as the Registry revises forms periodically and a stale version may be rejected.
How to fill out Form NSC23
Page one of the official form. Every field named below appears on it in the same order.
商業登記號碼 Business Registration Number
Enter the company’s Business Registration number exactly as shown on the Business Registration certificate issued by the Inland Revenue Department.
1 公司名稱 Company Name
Enter the full, registered name of the company in English and Chinese (if applicable), exactly as it appears on the Certificate of Incorporation.
2 被註銷或視為被註銷的庫存股份的詳情 Details of Treasury Shares Cancelled or Regarded as Cancelled
For each batch of treasury shares cancelled (or regarded as cancelled), provide: - Date on which the Shares are Cancelled or Regarded as Cancelled: The exact date (DD/MM/YYYY) the cancellation took effect. - Total Number of Shares: The total number of shares in that batch. - Class of Shares: The class, e.g., Ordinary, Preference.
You may include details of shares cancelled on different dates in a single return. List each date and its corresponding share total and class separately.
提交人資料 Presentor’s Reference
This section is for the person filing the form. Complete: - Name: Your name or the company name. - Address: Your correspondence address. - Tel: Contact telephone number. - Fax: Fax number (if any). - Email: Email address. - Reference: Your internal file reference (optional).
Do not write in the “For Official Use” box.
7 股本說明 (以緊接該等庫存股份被註銷或視為被註銷之後當時的狀況為準) Statement of Capital (As at the Time Immediately After the Treasury Shares are Cancelled or Regarded as Cancelled)
A. 股本 Share Capital
For each class of shares outstanding immediately after the cancellation, provide: - Class of Shares: e.g., Ordinary, Preference. - Currency: The currency in which the shares are denominated. - Total Number: Total number of issued shares of that class. - Total Amount: Total nominal value of those shares. - Total Amount Paid up or Regarded as Paid up: The amount considered paid. - Total Amount Unpaid or Regarded as Unpaid: The amount not yet paid (column (a) minus column (b)).
If the space is insufficient, use Continuation Sheet A.
B. 股份所附帶的權利的詳情 Particulars of Rights Attached to Shares
Only complete this section if the company has more than one class of shares. For each class, describe the rights attached, including: - Voting rights. - Rights to participate in a distribution as respects dividends. - Rights to participate in a distribution as respects capital. - Whether the shares are redeemable.
If the space is insufficient, use Continuation Sheet B.
本申報表包括下列續頁 This Return includes the following Continuation Sheet(s)
Tick the boxes for any Continuation Sheets (A or B) you have used, and state the total number of pages (including the main form and all continuation sheets).
5 簽署 Signed
The form must be signed by a Director or the Company Secretary (delete the inapplicable title). Enter: - Name: The full name of the signatory. - Date: The date of signing (DD/MM/YYYY).
Common mistake: The date of signing must be on or after the date of cancellation shown in section 2. Do not pre-date the signature.
Download the current form - always file the version on the issuing authority's site, not a copy.
Sources
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