On 7 January 2019, the Companies Registry announced that twelve Hong Kong companies were prosecuted for, among other things, failing to keep the significant controllers register at their registered offices, and the companies were fined.
Under the Companies (Amendment) Ordinance 2018 which came into force on 1 March 2018, companies incorporated in Hong Kong (except companies listed on the Hong Kong Stock Exchange) are required to take reasonable steps to ascertain and identify persons who have significant control over the company and maintain a significant controllers register (SCR) to be accessible by law enforcement officers.
Consequences for non-compliance
If a company fails to keep a register of its significant controllers, the company and each of its responsible persons commit an offence. Below are the offences and penalties at a glance:
Hong Kong incorporated companies (including overseas companies with Hong Kong incorporated subsidiaries) should ensure that they have:
- taken “reasonable steps” to identify the significant controllers of the company;
- kept a SCR containing the required particulars of every significant controller of the company;
- updated the SCR with any changes in the significant controllers' particulars; and
- made the SCR available for inspection by a law enforcement officer on demand.