Our website uses  cookies for statistical purposes.

  • Level 8 Cambridge House, No. 979 King's Road, Taikoo Place, Quarry Bay, Hong Kong
  • clients(at)opencompanyhongkong.com
  • +852 35651861
Our Articles

Allotment of Shares in Hong Kong

Allotment of Shares in Hong Kong

The allotment of shares in Hong Kong is the increase of the share capital through the creation and the issuance of new shares that will be distributed either to the existing shareholders or to new ones.

It is common to engage in this practice once the company founders have decided that it is beneficial to bring in more investments or partners into the business. This can take place once the company has established itself on the market and intends to grow.

In this article, we present the possibility to allot shares in case of a Hong Kong registered company. In addition to reading this informative guide, investors can reach out to our company formation agents in Hong Kong for complete information about share-related matters.

How the allotment of shares in Hong Kong takes place

The Hong Kong Companies Ordinance is the source of law providing information on the company’s share capital as well as the nature of shares.

For the purpose of share allotment in Hong Kong, the Ordinance stipulates that the company directors have the power to allot shares in the company or to grant rights to concert any security in to shares in the company, however, this can take place if the company gives the approval in advance for these powers, through a resolution.

A company director cannot engage in the allotment of shares in Hong Kong if the approval to do so has expired. Another conditions once an allotment took place is for the company to deliver a return of the allotment to the Registrar, which will be duly registered, no later than one month after the allotment took place.

The return submitted to the Registrar concerning the allotment of shares in Hong Kong includes the following:

  1. Capital information: details about the capital of the company at the time of the allotment;
  2. Details about the allotment: the number of shares that were allotted, the name and the address of each of the allotees, as well as if the company’s share capital has increased as a result of this process (and, if so, the amount by which it has increased);
  3. Shares allotted for consideration: in this case, the return must stipulate the amount that was paid or regarded as paid on each share and if any remains unpaid on each share;
  4. Shares allowed fully paid up: this can take place with or without capitalization and the statement will include the amount paid on each share.

When a company fails to deliver the return on the allotment of shares in Hong Kong to the Registrar within one month, the responsible individuals can be subject to a $700 fine for each day during which the offence continues to remain unresolved. In some situations, the Court can decide to extend the term if it is shown that failure to submit the return on the allotment of shares was accidental.

If you would like to know more about the conditions to register a share allotment in Hong Kong, you can reach out to our agents who specialize in company formation.

Our team can help you open a company in Hong Kong and also when you need to increase the capital by issuing new shares.

Types of shares in Hong Kong

A company in Hong Kong has only one class of shares of the rights attached to the said shares are the same. When a company has differed classes of shares it issued a share certificate describing the fact that the share capital is divided into different classes and also listing the specific voting rights that come with each class of share.

When a company has issued shares with no noting rights, the descriptive title for those classes will include the words “non-voting” or, as applicable, the Chinese characters for this.

While there is no particular requirement to pay a fee to allot shares, the Hong Kong Companies Registry does impose fees for other chares and operations when opening a company. These include the following:

  • – 340 HK$ for the statement of particulars change;
  • – 1,545 HK$ the registration fee for local private and public companies with a share capital;
  • – 295 HK$ for the company name change.

Hong Kong offers attractive conditions for company formation as well as a flexible regime for the alternation of the company’s share capital. There is no need to increase the capital by issuing new shares, and investors can also issue bonus shares without an increase of the share capital. The remaining requirement, as mentioned above, is to submit the notice with the Registry when any share capital alternation takes place.

For more information about company formation, including the allotment of shares in Hong Kong, please reach out to our incorporation specialists. We can also provide you wisht details on the reduction of the share capital and other information.