Lexis Insights

Legal News, Views, and Insights from LexisNexis Hong Kong

Never miss Lexis insights updates

Start reading the news feed of Lexis Insights right away by subscribing our social media channels

subscribe us

The significant controllers register regime and convictions

The obligation for companies incorporated in Hong Kong to keep a significant controllers register came into force on 1 March 2018 after new provisions were annexed to the Companies Ordinance (Cap. 622) by the Companies (Amendment) Ordinance 2018. A brief outline of this obligation and how companies may identify significant controllers under the Companies Ordinance can be found in our previous article.

In the Companies Registry’s highlights of prosecution cases dated 30 January 2019, the Registry reported the prosecution of 12 companies in November 2018 for non-compliance with the requirement to maintain a significant controllers register, among other companies and offences.

These convictions have occurred within one year of the new regime coming into force. Among other offences, the companies in question collectively failed to comply with section 653M(1), which sets out an applicable company’s obligation to keep its significant controllers register at the company’s registered office or at a prescribed place.

Penalties for failure to maintain significant controllers register

The requirement to maintain significant controllers register involves various facets of compliance and is governed strictly by the Companies Registry. By failing to comply, the company and every responsible person of the company commit a criminal offence and are each liable to different penalties. The following table shows a brief and non-exhaustive list of the penalties that the company and its responsible persons could be liable to:

Section in Companies Ordinance (Cap. 622)	Offence	Penalty
s653H	Failure to keep significant controllers register	Criminal offence Level 4 fine of HK$25,000 Further daily fine of HK$700
s653I	Failure to include the specified particulars within significant controllers register
s653J	Entering particulars into significant controller register without confirmation by the person or entity
s653M	Failure to keep significant controllers register at the company’s registered office or prescribed place, or failure to notify the Registrar of its location
s653N	Failure to notify Registrar of any change of location of significant controllers register
s653P	Failure to take reasonable steps to identify significant controllers and notify them of their status	Criminal offence Level 4 fine of HK$25,000
s653T	Failure to keep information up-to-date
s653X	Failure to produce significant controllers register for inspection by Companies Registry officer or law enforcement officer
s653ZE	Knowingly or recklessly making a statement or providing information that is misleading, false or deceptive in a material particular	Conviction on indictment: Fine of HK$300,000 and 2 years imprisonment Summary conviction: Level 6 fine of HK$100,000 and 6 months imprisonment

For more information on corporate law, please see:

Butterworths Hong Kong Company Law Handbook – 20th Edition

Hong Kong Company Law: Legislation and Commentary

Hong Kong Corporate Law

The Annotated Ordinances of Hong Kong – Companies Ordinance (Cap 622)

Lexis^® Practical Guidance – Hong Kong Corporate

For enquiries about the above publications, please contact your Account Manager via marketing.hk@lexisnexis.com