Hong Kong Statutory Records a New Company Must Keep Under the Companies Ordinance

Statutory Records a New Company Must Keep Under the Companies Ordinance

A Hong Kong private company limited by shares must maintain its statutory records from the day it receives its Certificate of Incorporation. These records are the legal backbone of the company's existence under the Companies Ordinance (Cap. 622). Failure to keep them, or to keep them in the correct location, is an offence that can result in prosecution and fines.

Hong Kong Statutory Registers Requirements

The Companies Ordinance requires every company to maintain five statutory registers, often called the statutory books. Each register must be kept in a legible form, whether paper or electronic. The registers must be available for inspection by the Companies Registry and, in some cases, by members of the public.

The five mandatory registers are:

• Register of members - contains the names, addresses and shareholdings of every member (shareholder) of the company.
• Register of directors - lists the full name, residential address and other prescribed particulars of each director.
• Register of company secretaries - records the name and address of the company secretary, and whether the secretary is a natural person or a body corporate.
• Register of charges - records any mortgages or charges created by the company over its assets.
• Significant controllers register - lists every individual or entity that has significant control over the company, as defined in Part 7A of Cap. 622.

Where to Keep Hong Kong Statutory Records

Keep the statutory registers at the company's registered office or at another prescribed place within Hong Kong. A prescribed place is any location in Hong Kong that is not the registered office but is notified to the Companies Registry using Form NR2 (Notice of Location of Registers and Records).

If the company changes the location of its registers, file a new Form NR2 within 14 days of the change. The location must be accessible for inspection during business hours. A post office box is not acceptable.

Hong Kong Statutory Books Checklist

For a newly incorporated company, the following records must be in place from day one:

• Register of members
• Register of directors
• Register of company secretaries
• Register of charges (even if no charges exist yet, the register must be created)
• Significant controllers register
• Minutes of all board meetings and shareholder meetings
• Accounting records (books of account)
• A copy of the company's articles of association
• A copy of the Certificate of Incorporation and Business Registration Certificate
• Records of all share issuances and transfers

The company must also keep copies of all resolutions passed by members and directors, and any written consents to resolutions.

Hong Kong Register of Members

The register of members is the central record of who owns shares in the company. It must contain the name and address of each member, the date on which the person became a member, the number and class of shares held, the amount paid or agreed to be paid on the shares, and the date on which a person ceased to be a member.

Update the register within two months of any change in membership. Any member of the company may inspect it free of charge. Any other person may inspect it on payment of a prescribed fee.

Minutes of Meetings

The company must keep minutes of all proceedings at meetings of members (shareholders) and meetings of directors. Record the minutes in writing within a reasonable time after the meeting. The chair of the meeting, or the chair of the next meeting, must sign them.

Minutes are evidence of the proceedings and are admissible in legal proceedings. Keep them for at least 10 years from the date of the meeting. Failure to keep minutes is an offence under section 662 of the Companies Ordinance.

Accounting Records

Every company must keep accounting records that are sufficient to show and explain the company's transactions. These records must disclose the financial position of the company with reasonable accuracy and enable the directors to ensure that the financial statements comply with the Ordinance. Keep the records at the registered office or at another place the directors think fit.

Accounting records must be retained for at least 7 years from the date on which they were made. This applies even if the company ceases to trade during that period. The records must be in English or, if in another language, accompanied by an English translation.

Electronic Records

The Companies Ordinance permits statutory registers and records to be kept in electronic form, provided the information can be reproduced in a legible, durable form. Back up electronic records. They must be accessible for inspection without undue delay.

If a company chooses to keep its statutory registers electronically, the electronic file must be stored at the registered office or the prescribed place notified on Form NR2. The location requirements do not change.

Inspection Rights

The following persons have the right to inspect the statutory registers:

• Register of members - any member free of charge; any other person on payment of a fee
• Register of directors - any member free of charge; any other person on payment of a fee
• Register of company secretaries - any member free of charge
• Register of charges - any person on payment of a fee
• Significant controllers register - any person on payment of a fee, subject to certain safeguards

The company must make the registers available for inspection during business hours for at least two hours per day. A refusal to allow inspection is an offence.

Offences and Penalties

Failure to maintain any of the statutory records, or failure to keep them at the correct location, is an offence under the Companies Ordinance. The company and every officer in default may be liable to a fine. For continuing offences, a daily default fine may also apply.

The Companies Registry conducts inspections and may issue directions to a company that has failed to comply. In serious cases, the Registrar may apply to the court for an order compelling compliance.

Retention Periods Summary

Practical Steps for a New Company

Within the first 30 days after incorporation, the company should:

1. Set up the five statutory registers in a bound book or secure electronic system
2. Enter the initial members, directors and company secretary
3. Create the significant controllers register and identify the designated representative
4. File Form NR2 if the registers will be kept at a place other than the registered office
5. Open a bank account and begin maintaining accounting records
6. Arrange for minutes to be taken at the first board meeting

The company must also appoint a designated representative for the significant controllers register. This person is responsible for maintaining the register and responding to inspection requests. The designated representative must be a member, director or employee of the company, or a person approved by the Registrar.

Further Information

The Companies Registry publishes guidance notes on maintaining statutory records. The relevant legislation is the Companies Ordinance (Cap. 622), particularly Parts 5, 6, 7 and 7A. For the location of registers, see section 662 of Cap. 622. For Form NR2, refer to the Companies Registry's website at www.cr.gov.hk.