What are duties & requirements of Hong Kong company director?

Hong Kong is one of the most popular jurisdictions that foreign businesses and investors choose to set up their businesses. One of Hong Kong company formation requirements is that the applicants must have a director for their companies.

Basic Hong Kong company director requirements

Two types of companies that are chosen by the foreign are Company Limited by Shares and Company Limited by Guarantee.

The director’s name can be a person or a company for the Hong Kong company but at least one director’s name must be a natural person. There is no limited number of maximum directors permitted. In the case of Limited by Shares, at least one director is required, in contrast to Limited by Guarantee, required at least two directors.

However, in exceptional cases, a corporation cannot be a director of both public and private companies if they are listed on the Stock Exchange of Hong Kong. The same for the Limited by Guarantee company where a corporation is a director of a company.

Directors can be any nationality of the Hong Kong business, and they can be either Hong Kong residents or foreigners. In addition, directors must be 18 years or above and they cannot be insolvent or have been convicted for any dereliction of duties.

Publicity information 

The information of the directors, shareholders, and company secretary of a Hong Kong company will be disclosed to the public according to Hong Kong Company Laws.

Every Hong Kong company has to keep a record of registration of its directors in which the members of the public can access this information. The register recording must include not only the name of each director but also the personal history of each director which were filed to the Registrar of Companies.

It is mandatory to file details about the company officers with the Hong Kong Registrar of Companies. Nonetheless, if you wish to maintain the confidentiality of their information as a new company director. You can use the professional services firm of One IBC^® for appointing a nominee shareholder and nominee director.

Hong Kong Directors Duties

According to the Hong Kong Companies Registry, Hong Kong directors duties included are shown below:

1. Duty to act in good faith for the benefit of the company as a whole: A director is responsible for the interests of all of the company’s shareholders, both present and future. The director must achieve the fair outcomes between the members of the Board and shareholders
2. Duty to use powers for a proper purpose for the benefit of members as a whole: A director must not use his power for personal benefits or gain control of the company. The director’s exercise of powers must be aligned with the purposes of the company.
3. Duty not to delegate powers except with proper authorization and duty to exercise independent judgment: A director is not allowed to delegate any of the director’s power unless authorized by the company’s articles of association. Otherwise, the director must exercise the director’s judgment in relation to the power assigned to the director.
4. Duty to exercise care, skill, and diligence.
5. Duty to avoid conflicts between personal interests and interests of the company: The personal interests of the director must not conflict with the company’s interests.
6. Duty not to enter into transactions in which the directors have an interest except in compliance with the requirements of the law: he must not enter into transactions with the company. Under the laws, a director has to disclose the nature and extent of his interest in all transactions.
7. Duty not to gain advantage from the use of position as a director: The director must not use his position and/or power to gain advantages for personal gains, or someone else directly or indirectly, or in situations which cause damages to the company.
8. Duty not to make unauthorized use of the company’s property or information: A director must not use the company’s assets, including property, information, and opportunities present to the company the director is aware of. Unless the company has given the consent to the director and the matters have been disclosed in the board meetings.
9. Duty not to accept a personal benefit from third parties conferred because of the position as a director.
10. Duty to observe the company’s constitution and resolutions.
11. Duty to keep accounting records.