HONG KONG
PRIVATE COMPANY LIMITED BY SHARES (COMPANY)
MAINTENANCE GUIDELINES

This guideline contains only a summary of matters relating to Private Companies Limited by Shares incorporated in Hong Kong as contained in the Companies Ordinance, Chapter 32 of the Laws of Hong Kong. It is not intended as a substitute for reading of the Company's Memorandum and Articles of Association and the Ordinance, nor is it intended as a substitute for professional advice.


1 YOUR COMPANY KIT AND MAINTENANCE OF CORPORATE RECORDS

1.1 Memorandum and Articles of Association ("M&A")

This company kit includes 20 copies of the M&A. Kaizen will be pleased to provide further copies upon request and at extra costs.

Any amendments to the M&A may be passed by resolution of shareholder(s) and must be filed with the Companies Registry in Hong Kong. Amendments are effective from the date of resolution.

Kaizen Corporate Services Limited ("Kaizen") will be pleased to assist with providing standard form amendments, with filing amendments and with re-printing the M&A on request.

1.2 Minutes and Financial Records

A company is required to keep minutes of all meetings of directors, members, committees of directors, committees of officers and committees of members. Copies of all written resolutions consented to by the foregoing parties must also be kept.

A company must also keep proper accounts and records and prepare financial statements that reflect the financial position of the Company. In addition, annual financial statements must be audited by accountants practicing in Hong Kong.

The books, records and minutes of the Company must be kept at the Registered Office of the Company in Hong Kong or at such other place that the directors determine.

Any member of a company may, upon request, inspect the records of that company. In the event of the directors refusing to allow such inspection, a member has the right to apply to court for an order to allow the inspection.

Kaizen provides draft minutes of first director's meeting with each company kit.

1.3 Share Certificates

Certificates for registered shares are provided by Kaizen in each company kit. Every member is entitled to a share certificate, which must be issued under the common seal of the company and with the signature of any director.

1.4 Company Seal

A company is required to have a common seal and an imprint thereof must be kept at the Registered Office of the Company in the Hong Kong. Kaizen provides seals with the company kit for all companies.


1.5 Register of Members

Every company is required to keep a share register, which is prima facie evidence of any details required by the Companies Ordinance to be contained in the Register. Forms contained in each company kit make provision for all information required by the Ordinances. The original or copy of the Register of Members must be kept at the Registered Office in the Hong Kong. Kaizen, if appointed as Company Secretary, should be notified of any share transfers or issue of additional shares.

1.6 Register of Transfers, Directors and Secretaries

A company is required by law to maintain these registers. They must be kept at the Registered Office of the Company. Kaizen, if appointed as company secretary, should be notified of any appointments or resignations of directors.

2 REGISTERED OFFICE AND COMPANY SECRETARY

2.1 Registered Office

Every company incorporated in Hong Kong must have a Registered Office which is situated in Hong Kong and it must notify the Registrar of Companies of the situation of its registered office and any change within 14 days after the date of incorporation of the company or of the change.

The Registered Office for your company is at Room 1106, Futura Plaza, 111 How Ming Street, Kwun Tong, Hong Kong.

2.2 Records held at the Registered Office

The Registered Office should, as a minimum, retain the following documents for records: a copy of Certificate of Incorporation, a copy of Memorandum and Articles of Association, Register of Members, Register of Directors, Register of Company Secretary, Register of Transfer of Shares, Register of Charges and Minutes of Meetings etc.

2.3 Company Secretary

When a company appoints its Secretary or Joint Secretary (‘Secretary’) for the first time after incorporation, it must notify the Registrar of Companies of the particulars of such office bearers within 14 days of their appointment. The Registrar of Companies should also be notified within 14 days of any subsequent changes.

The Company Secretary for your company is Kaizen Secretaries Limited.

3. TAX AND OTHER FILINGS

3.1 Profits Tax Return (“PTR”)

On the 18th month after incorporation, the company will receive a Profit Tax Return (PTR) from the Inland Revenue Department (IRD). The company should submit the duly completed PTR with supporting documents (including audited financial statements and tax computation) to the Department within one month from the date of issuance of PTR. Any late filing may lead to penalty.

On April 2 (the first working day on April) each year from second year and thereafter, the IRD will issue a PTR to each of the companies. The PTR should be duly completed and submitted to IRD within one month after the date of issuance together with audited financial statements and any other supporting documents as IRD consider necessary.

PTR filing exemption application can also be submitted to the Inland Revenue Department if any one of the Directors of the company confirms that either the Company has not yet commence business or no profits of the Company has been generated inside Hong Kong. Kaizen can assist you with such application. Please contact Kaizen for details.


3.2 Employer’s Return

An Employer's Return for each year of assessment will be issued to all employers on the first working day on April every year. All employers are required to furnish the return within one month from the date of issue, unless an application for extension in writing is filed with the Inland Revenue Department (IRD). A complete set of annual employer's return of remuneration and pensions contains a form BIR56A and forms IR56B. Before you complete the return, you should read carefully the "Notes and Instructions" given on the form BIR56A. A "NIL" return of BIR56A is still required even if you have no employees or pensioners chargeable to Salaries Tax.

Kaizen can provide assistance for preparation and filing of ER. Please contact us for details.

3.3 Annual Return (“AR”)

Every company must within 42 days after its most recent anniversary of its date of incorporation submit an AR to Company Registry. The following registration fees are payable on the delivery of an AR to the Company Registry:
>     If delivered within 42 days after the anniversary of incorporation – HK$105;
>     If delivered more than 42 days after but within three months after the anniversary of incorporation – HK$870;
>     If delivered more than three months after but within six months after the anniversary of incorporation – HK$1,740;
>     If delivered more than six months after but within nine months after the anniversary of incorporation – HK$2,610;
>     If delivered more than nine months after anniversary of incorporation – HK$3,480;

If the AR is not filed within the prescribed time limit, the company, every director, secretary and manager of the company will be liable to face prosecution and, if convicted, default fines. The maximum penalty is HKD50,000 for each breach together with a daily default fine of HKD700. GIC annual retainer fee for provision of Company Secretary is inclusive of preparation and assistance of filing of AR.

3.4 Renewal of Business Registration Certificate (“BR”)

A BR renewal demand note will be sent by the Business Registration Office approximately one month before the current BRC expires. Regardless whether you actually carry out business or not, it is necessary to renew BRC. Upon payment, the demand note will become a valid BRC. Kaizen annual retainer fee for provision of Company Secretary is inclusive of assistance of renewal of BRC.

4. Dissolution of a Company

4.1 Types of Dissolution

A company may be dissolved by the following methods: Deregistration, Members’ Voluntary Winding-up, Creditors’ Voluntary Winding-up and Compulsory Winding-up by the Court.

4.1 Deregistration

A company must satisfy the following conditions in order to apply for Deregistration:

(1) The company has never commence business or operation, or has ceased to carry on business or ceased operation for more than 3 months immediately before the application;
(2) The company has no outstanding liabilities; and


A company which has outstanding liabilities can apply to be deregistered if its debts are:

(1) Settled by its parent company or related companies, or by its promoter, directors, or members; or
(2) Waived by its creditors, e.g. its creditors consist of its parent company or related companies, its promoter, or members, etc, and these creditors execute a deed of waiver to signify their consent to waive the debts owed to them.

The processing time for a deregistration application is about 6 months. Upon dissolution, all the company’s property (including credit balance in the company’s bank account) will vest in the Government of the Hong Kong Special Administration Region as bona vacantia.

4.2 Members Voluntary Winding-up

A company can be dissolved by a members’ voluntary winding-up only if it is solvent, i.e. it can settle all of its debts in full. If a company has been put into a members’ voluntary winding-up and the liquidators are subsequently of the opinion that the company will not be able to pay its debts in full within the period stated in the declaration of solvency, they must summon a meeting of the credits and lay before the meeting a statement of the assets and liabilities of the company, i.e. the winding-up is converted into a creditors’ voluntary winding-up. Liquidator normally will be individual lawyer, lawyer firm, accountant or accountancy firm.

5 THE COMPANIES REGISTRY

5.1 Company Documents held

The Companies Registry maintains a full set of a company’s corporate documents, includes but not limited to:
(1) A copy of a company's Certificate of Incorporation;
(2) Its Memorandum and Articles of Association and any amendments thereto;
(3) A copy of Form D1 (Notification of Appointment of First Secretary and Directors);
(4) A copy of Form D2A (Notification of Change of Secretary and Director (Appointment／Cessation), for subsequent appointment and resignation of directors and secretary), if any is filed;
(5) A copy of Form D3 (Consent to Act as Director or Alternate Director) for each director appointed;
(6) A copy of Form R1 (Notification of Situation of Registered Office) for every change of Registered Office;
(7) Any other documents filed with the Companies Registry.

The Registry will provide certified copies of these documents and search company files as required. Kaizen will be pleased to assist with all such requests for certified copies of such documents or searches.

5.2 Certificates of Good Standing

The Companies Registry of Hong Kong do not issue Certificates of Good Standing for a company registered in Hong Kong. A company will remain in Good Standing for so long as it files Annual Returns, renews Business Registration Certificate and submits Tax Returns in a timely fashion.

5.3 Annual Government Licence Fees and Registered Office/Company Secretary Fees

A company must pay annual registration fee and business registration fee as follows: -

Amount
Annual registration fee (with filing of Annual Return) HKD105 (USD14)
Business Registration Certificate HKD2,600 (USD335)

Annual fees of US$375 are payable for Registered Office and Company Secretary Services. The annual fees are due on one month before the anniversary date of incorporation.


6 PAYMENT OF ANNUAL FEES

Kaizen will send invoices for annual Registered Office and Secretary Service fees and Government licence fees by mail to the address it has on record on 1st March and 1st September each year. Please notify us of any changes in correspondence address, telephone or fax numbers, names of responsible persons and file reference numbers that should be quoted for this purpose. There will be Government penalties and possible imprisonment for late payment of fees.