Every company in Hong Kong must have at least one shareholder to operate. They play an essential role in the control, financing, governance and operations of a business. Read on to find out more about shareholders’ rights & duties in Hong Kong.
What is a shareholder?
A shareholder is a person, company or institution that holds share(s) in a company. To be a shareholder, they must hold a minimum of one share in the capital of the company.
If a company is going well, the shareholder will earn more profits which are distributed as dividends, but when the company loses money, the value of the share will drop, and shareholders can lose money.
Shareholders also have rights to vote on specific matters regarding the company and can appoint directors.
Roles of a shareholder
- Appointing and removing directors
- Deciding how much directors receive for salary
- Deciding on the powers they will grant to the directors
- Making decisions on issues directors cannot make
- Monitoring and approving the company’s financial statements
Who can be a shareholder?
- At least 18 years old
- Can belong to any nationality
- Can be a person or a company
Can the shareholder be a director?
A shareholder and director are two different bodies, but a shareholder can be a director. The shareholder is the owner of the company and can control the management and receive profits, while directors are hired by the shareholders to run the day-to-day operations of the company. Directors are responsible to shareholders.
As shareholders are owners of the company, they are entitled to the following rights:
- Right to vote
- Right to dividends
- Right to a distribution of part of the capital once the company is dissolved
- Right to receive audited financial statements
- Right to sue for wrongful acts
- Right to buy new shares
The shareholder’s responsibilities include:
- Assuring that the company managed well by monitoring the company’s performance
- Attending and participating in the Annual General Meeting (AGM) and other meetings
- Examining account books and records
- Appointing and electing the company’s officers
- Voting in elections and matters in the AGM
Since Hong Kong allows 100% foreign ownership, this gives opportunities for foreigners to open companies in Hong Kong and be a shareholder.
If you are looking to be a shareholder of a company in Hong Kong, either an existing company or a new one, Acclime can help you with all of your requirements.
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