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Shareholders of Hong Kong Companies

Shareholders of Hong Kong Companies

According to the type of company, the Companies Ordinance stipulates that a business entity in Hong Kong must have a minimum and a maximum number of shareholders. Their qualifications duties and responsibilities are described in the Ordinance.

Private companies limited by shares are required to have at least one shareholder and a maximum number of 50 shareholders. There are restrictions as to whether or not someone can be a shareholder in the company. For example, employees and previous employees who own shares in the company are not considered shareholders. These types of companies cannot transfer shared and cannot make their share available to public subscription.

Public companies in Hong Kong are not subject to the same share transfer and subscription restrictions as private ones. They can have shareholders who may hold shares in the company and, if the founders choose to do so, they may list the company on the Hong Kong Stock Exchange.

The types of shares that may be issued by Hong Kong companies include:

– ordinary shares;

– preference shares;

– non-voting shares;

– redeemable shares;

– deferred shares, convertible and exchangeable bonds and others.

Our Hong Kong company formation specialists are able to give you detailed information about the liabilities and rights of a shareholder in Hong Kong. This information can be useful if you are interested in purchasing shares in a company, if you are the director of a company or if you want to open a company in Hong Kong.

The qualifications of shareholders in Hong Kong

In Hong Kong, a shareholder can be either an individual or another company. There are no restrictions regarding nationality and the shareholder can reside in any country. The shareholder’s meetings can take place anywhere, not necessarily in Hong Kong.

When two or more individuals own common shares, they will be considered as one shareholder. An important aspect regarding shareholders in Hong Kong is that they must be over 18 years of age in order to be able to hold shares. Also, full disclosure is required regarding the names, occupation and address of the shareholders. This information is included in the Companies Registry and is public information. Individuals who do not want to reveal their identity while doing business in Hong Kong can choose to work within or register an offshore company in Hong Kong.

A shareholder’s rights and obligations

Shareholders of Hong Kong companies are entitled to receive their part of the dividend payment of the company. Also, if the company is liquidated they are entitled to receive what is left of the assets after they have been distributed to the creditors. In certain management and administrative cases, the shareholders must convene a general meeting and agree upon issues concerning the company.

Shareholders must pay their shares in full and subscribe to the shares of the company. The shareholder rights can vary according to the types of shares they hold and also according to any particularities included in that company’s Articles of Association or in the company’s shareholder’s agreements.  Shareholders in Hong Kong may have personal liability to the extent of the shares they own in the company.

For more information about the duties and responsibilities of shareholders in Hong Kong and for detailed aspects regarding company formation in Hong Kong, please contact our Hong Kong company formation agents.