Hong Kong Company Directors: Duties & Requirements

Most founders setting up a Hong Kong company become its first director without thinking much about it. The role carries legal duties from the day the company is incorporated, and those duties apply whether you own 100% of the shares or none.

This guide covers who can be a director, how many a company needs, the duties the law places on directors, and how to appoint or remove one. If you're looking at appointing someone to hold the role on your behalf, our guide to nominee directors in Hong Kong covers that separately.

Who Can Be a Director of a Hong Kong Company?

A Hong Kong private company limited by shares needs at least one director who is an individual aged 18 or over, of any nationality and living anywhere. The full rules are short:

The Companies Registry's FAQ on directors confirms that a non-Hong Kong resident can be appointed as a director of a local company. The same isn't true of the company secretary, who must ordinarily live in Hong Kong or, if it's a company, have its registered office or a place of business there.

A director doesn't need to hold shares unless the company's articles of association say so. A shareholder can be a director, and many small companies have the same person in both roles.

How Many Directors Does a Company Need?

Section 457 of the Companies Ordinance (Cap. 622) requires every private company to have at least one director who is a natural person. There's no upper limit in the Ordinance, though the company's articles may set one.

A sole director can't also act as the company secretary. In practice, a founder running a one-person company appoints a corporate service provider as secretary.

The Reserve Director Option

If your company has a single shareholder who is also its only director, section 455 lets the company nominate a reserve director. The reserve director takes over only if the sole director dies, which stops the company from being left with nobody able to act for it while the estate is sorted out.

The reserve director must be an individual aged at least 18. Nominating one is optional.

Can a Company Be a Director?

Yes, in most private companies. A body corporate can be appointed as a director of a private company, as long as the company has at least one individual director as well.

The exception is a private company that belongs to a group with a listed company in it. Under section 456, those companies, along with public companies and companies limited by guarantee, can't have corporate directors.

What Are a Director's Duties?

Directors owe their duties to the company as a whole, which includes its present and future shareholders. A director who breaches them can face civil or criminal proceedings and may be disqualified from acting as a director.

The Companies Registry's Guide on Directors' Duties sets out 11 general principles. Grouped by what they mean day to day:

The Standard of Care

Section 465 of the Companies Ordinance sets the standard a director is measured against. A court asks what a reasonably diligent person would have done with the knowledge, skill and experience expected of someone in that director's role. If the director has more expertise than that, such as a qualified accountant sitting on the board, they're held to their own higher standard as well.

That means a director can't defend a poor decision by saying they didn't understand the company's finances. Signing off accounts you haven't read, or leaving all financial matters to a co-director without checking, can fall below the standard.

Trading While Insolvent

The Registry's guide also warns directors not to let the company take on more credit when they know there's no reasonable prospect of avoiding insolvency. Doing so risks liability under the fraudulent trading provisions in section 275 of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32).

How to Appoint a Director

The first directors are named in the incorporation form (Form NNC1), and each one signs a consent to act.

After incorporation, the articles of association decide how new directors are appointed. Under the model articles for private companies, which many Hong Kong companies adopt, a new director can be appointed by an ordinary resolution of the shareholders or by a decision of the existing directors. Check your own articles before you act, because some companies change this rule.

The route matters later. Under article 22 of the model articles, a director appointed by the board must retire at the next annual general meeting, or, if the company doesn't hold AGMs, within 9 months after the end of the relevant accounting period. They can then be reappointed. A director appointed by ordinary resolution holds office with no time limit unless the appointment says otherwise.

Once the appointment is made:

1. Record the board decision or shareholders' resolution in the company's minutes.
2. Enter the new director in the company's register of directors.
3. File Form ND2A with the Companies Registry within 15 days, including the new director's signed consent to act.

Our step-by-step guide to changing a company director in Hong Kong covers the documents and the filing itself in more detail.

The same form, with the same 15-day deadline, applies when a company secretary is appointed or leaves. If the form is filed late, the company and every responsible person can be fined up to HKD 25,000, plus HKD 700 for each day the default continues.

Removing a Director or Resigning

Removal by Shareholders

Under section 462, shareholders can remove a director by ordinary resolution at a general meeting, whatever the articles or the director's service contract say. The resolution needs special notice, which means the company must receive notice of the intended resolution at least 28 days before the meeting. The director is entitled to be heard at the meeting and to send written representations to shareholders.

Removing a director doesn't cancel any compensation they're owed under their contract, so check the terms before you start.

Resignation

A director resigns by giving written notice to the company. The notice doesn't need to be signed, and the Registry confirms it can be sent by email if the company has agreed to receive documents electronically.

The company then files Form ND2A within 15 days. If the resigning director has reason to think the company won't file it, they can file Form ND4 with the Registry themselves.

A company can't leave itself without a director. If the only director wants to resign, appoint a replacement first.

What Director Information Is Public?

A director's name and correspondence address appear on the public companies register. Under the Registry's New Inspection Regime, a director's usual residential address and full identification number are now "protected information". Members of the public can see only a correspondence address and a partial ID number.

Since 27 December 2023, directors can also apply to have their residential address and full ID number withheld from documents filed before the regime started. Certain specified persons can still apply to the Registry for access.

How Statrys Can Help

Statrys has incorporated over 1,600 companies and acts as company secretary for Hong Kong companies, keeping your register of directors up to date and filing changes such as Form ND2A on time. If you plan to add or replace a director, our team can prepare the resolutions and filings for you. Statrys doesn’t currently onboard companies where a US citizen or US resident is a director, or a shareholder or ultimate beneficial owner holding more than 10%.

To get started, see our Hong Kong company registration service. If your company already exists, you can switch your company secretary to Statrys.