We often hear about personal secretaries in daily life. But did you know that companies actually have secretaries called company secretaries (com sec) as well? What exactly does a company secretary do? Is it a must to have a company secretary for your company? Read on to find out.
What does a company secretary do?
A company secretary is a statutory duty in a capital market. Their role is comparable to an executive director, assisting in effective corporate governance, coordinating and helping various departments to comply with local company regulations, and providing the board of directors with information on statutory requirements. Company secretaries are crucial to good governance in commercial societies, and provide professional assistance when company directors make decisions or discuss business development.
The Indispensability of Company Secretaries
According to the Cap. 622 Companies Ordinance, all limited companies must have a company secretary, otherwise they can be fined up to HKD100,000. If a fined company continues to not have a company secretary, they can be fined HKD2,000 every day. To avoid mistakenly breaking the law, you must find a responsible company secretary.
Who can be a company secretary?
Cap. 622 Companies Ordinance does not require company secretaries to have academic requirements or professional qualifications, as long as the following conditions are met:
- They must be a natural person who ordinarily resides in Hong Kong; or
- The registered office or place of business of the company is in Hong Kong.
So if you are one of the directors of a certain company, you can actually act as company secretary as well, unless the company only has you as the sole director.
Responsibilities of a Company Secretary
As company secretaries of listed companies have too many duties, we will mainly discuss the main responsibilities of company secretaries in SMEs:
- Incorporation of a company (for detailed procedures on establishing a company, please read Teaching You More About the Characteristics of a Limited Company);
- Prepare and submit documents to government departments (more on what common documents are available below); as well as
- Due diligence on important controllers
Common Documents that Require Submission
One of the most important duties of a company secretary is to submit documents to the Companies Registry on time. Here is an introduction to common documents that require submission:
A. Annual Return (NAR1)
An annual return (refer to Note 1 for form and specimen) is a document that every limited company has to proactively submit to the Companies Registry every year. The form should reflect the latest information of directors, shareholders and the company secretary (name, address and HKID number, etc.) and basic information of the company (company name, postal address, number of shares allocated, etc.). Registration fees to be paid when submitting annual returns are as follows:
|Time of Form Submission||Fees (HKD)|
|Within 42 days after the company’s anniversary date||105|
|43 days to 3 months after the company’s anniversary date||870|
|3 to 6 months after the company’s anniversary date||1,740|
|6 to 9 months after the company’s anniversary date||2,610|
|Over 9 months after the company’s anniversary date||3,480|
As you may have noticed already, the later annual returns are submitted, the more the required registration fee will increase by. That is why submitting annual returns on time can definitely reduce unnecessary costs.
B. Notification of Change of Company Secretary and Director (Appointment/Cessation) (ND2A)
Form ND2A is filled when companies appoint a new company secretary or director, or suspend an existing company secretary or director. This form can be used for appointment and suspension of company secretaries or directors of the concerned company at the same time. Additionally, when submitting Form ND2A to the Companies Registry, there are no fees or charges.
1. Appoint a new company secretary or director
Fill in the information of the new company secretary or director (name, address, certificate number, appointment date, etc.)
2. Suspension of a company secretary or director
Fill in the information of the suspended company secretary or director (name, certificate number, appointment date, etc.)
Company dismissal of company secretary or director
C. Notice of Resignation of Company Secretary and Director (ND4)
Form ND4 is for when the current company secretary or director wishes to resign. Information of the suspended company secretary or director should be filled in (name, certificate number, appointment date, etc.). There are no fees or charges when submitting Form ND4 to the Companies Registry.
The everyday work of company secretaries in small and medium enterprises is not complicated. However, even when documents to be submitted are easy to fill out, as a company secretary, you should be responsible and submit documents as soon as possible to avoid unnecessary fines. Therefore, when choosing company secretarial services, we recommend finding a secretarial service company that has a “Trust or Company Service Provider License” to be your company secretary, as a licensed secretarial service company will be able to demonstrate greater conscientiousness and familiarity with company law.
Pacers is a company that provides multifaceted and professional consulting services. We are eager to grow with our clients, so if you encounter any issues on company secretarial services, you’re welcome to contact us through our website or email at firstname.lastname@example.org.
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Note 1: Annual Return (NAR1)
Note 2: Notification of Change of Company Secretary and Director (Appointment/Cessation) (ND2A)
Note 3: Notice of Resignation of Company Secretary and Director (ND4)