Hong Kong Companies Registry’s New Inspection Regime and Personal Data Protection (Phase 2)

In our previous article[1], we introduced the three phases of the new inspection regime under the Companies Ordinance of Hong Kong. Phase 1 was implemented on 23 August 2021. In this article, we will discuss Phase 2 which will come into effect on 24 October 2022.

New inspection regime

The Companies Register maintained by the Companies Registry contains personal information available for public inspection. Such personal information includes the usual residential addresses and full identification numbers of directors of companies, and full identification numbers of company secretaries and some other individuals such as liquidators and provisional liquidators (collectively, “Protected Information”).  Similar personal information is also required to be contained in the registers kept by companies.

To enhance protection of sensitive personal information, while keeping up the transparency and usefulness of the Companies Register, the new inspection regime is introduced in three phases.

Phase 1: From 23 August 2021, companies may replace usual residential addresses of directors with their correspondence addresses, and replace full identification numbers of directors and company secretaries with their partial identification numbers on their own registers for public inspection. This mainly concerns the Protected Information on the registers kept by companies.
Phase 2: From 24 October 2022, Protected Information on the Index of Directors on the Companies Register will be replaced with correspondence addresses and partial identification numbers for public inspection. Protected Information contained in documents filed for registration with the Companies Registry after such date will not be open to the public.
Phase 3: From 27 December 2023, data subjects could apply to the Companies Registry for protecting from public inspection their Protected Information contained in documents registered with the Companies Registry, and replace such information with their correspondence addresses and partial identification numbers.

Disclosure of Protected Information to Specified Persons

Notwithstanding commencement of Phase 2, the following designated types of persons (“Specified Persons”) can apply to the Companies Registry for access to Protected Information of directors and other persons of companies:

  • a data subject
  • a person who is authorized in writing by a data subject to obtain the information
  • a member of the company (e.g., a shareholder of a company limited by shares)
  • a liquidator
  • a trustee in bankruptcy
  • a public officer or public body
  • a person specified in the Schedule to the Companies (Residential Addresses and Identification Numbers) Regulation (Cap. 622N) as a scheduled person[2]
  • a solicitor or foreign lawyer who practices law in a Hong Kong law firm
  • a certified public accountant (practising)
  • a financial institution or designated non-financial businesses and professions

What do companies need to do?

In filing prescribed forms with the Companies Registry after 24 October 2022, a Hong Kong company still has to provide the Protected Information, but only the correspondence addresses and partial identification numbers will be available for public inspection. The company must also include the correspondence addresses of its natural person directors in its own register of directors.

For a local company and a non-Hong Kong company registered before 24 October 2022, the Companies Registry records the company’s principal place of business in Hong Kong as the correspondence address of its natural person directors. After the commencement of Phase 2, a director’s correspondence address will be updated if a separate form to report such address is filed with the Companies Registry.

Post office box numbers cannot be used as correspondence addresses of directors.

To facilitate the implementation of Phase 2, the Companies Registry has revised 26 specified forms for public use starting from 24 October 2022 in order to facilitate the reporting of correspondence addresses and identification numbers of officers and other relevant individuals. A “PI-sheet” is also added to each relevant form for reporting Protected Information which will not be made available for public inspection.

[1] https://www.eylaw.com.hk/en_hk/publications/our-latest-thinking/2021/aug/company-registry-new-inspection-regime

[2] https://www.cr.gov.hk/en/publications/docs/47-e.pdf

White & Case advises on Rail First Asset Management Acquisition Financing

Global law firm White & Case LLP has advised ING Bank (Australia) Limited, Norddeutsche Landesbank Girozentrale, Singapore Branch (Nord/LB) and Siemens Bank GmbH, Singapore Branch as mandated lead arrangers, underwriters and bookrunners (MLAUBs) on the senior debt facilities for the acquisition of Australian rollingstock leasing company Rail First Asset Management (Rail First), which will be acquired jointly by Amber Infrastructure Group and DIF Capital Partners.

“Amber Infrastructure Group and DIF Capital Partners have secured a high quality growth asset in a unique asset class in Australia,” said White & Case partner Joel Rennie who led the Firm’s deal team. “The Sponsors and MLAUBs drew on recent European experience in this asset class in order to structure and achieve a successful outcome that strongly positions the business for its next phase of growth”.

The debt facilities will be used to partly fund the acquisition, as well as fund Rail First’s ongoing capital expenditure requirements.

Rail First, a supplier of integrated rollingstock and maintenance to the rail industry, owns approximately 1,300 locomotives and wagons, with workshops in Islington (South Australia) and Goulburn (NSW).

The White & Case team which advised on the transaction was led by partner Joel Rennie (Sydney) and included partners Cameron Watson (Sydney) and Caroline Sherrell (London), supported by associate Matthew Weetman (Sydney).

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4 Emerging Trends In Personal Injury Cases

There are varying factors influencing emerging trends in personal injury cases. The changes are becoming more noticeable, so those involved, such as law firms, must consider them to help clients better. Even dealing with the pandemic has brought in some of these trends that have to do with how cases are handled, filed, or settled. And the following are trends to look out for this year.

  1. The Rise Of Distracted Driving

Road accidents are some of the most devastating causes of personal injury cases to the use of mobile phones while driving, which has resulted in some of the worse vehicular crashes in history. Taking your eyes off for five seconds to send a text message was compared to driving at the speed of 55mph with your eyes closed.

Mobile phones give us the advantage of long-distance communication anywhere we go. Texting benefits those who want to keep communication private. But while it offers us the said advantages, it becomes dangerous when driving is involved. The sad thing is that drivers continue to use mobile phones while driving, resulting in car crashes that take too many lives away.

If you are involved in a car crash, you must understand your rights and the measures you must take to prove that the accident is not your fault. If it is, you can still benefit from asking for legal advice from an experienced and reputable personal injury lawyer from an injury network based in Miami or any other network near your place.

  1. Cases Settled Without Reaching Court

When personal injury cases reach court, it typically means that both parties cannot agree on a compromise. Insurance companies and the defendants found that they were willing to settle with victims last 2021. It’s common knowledge that once parties decide to push the case to court, it could drag on for months or years, with everyone suffering from legal fees they must pay. Stress can immensely affect their personal lives and cost them even more money.

A settlement is sometimes the most peaceful solution if you trust that the insurance company will pay the amount you’re asking for or somewhere near it. When facing this situation, you must have a trusted legal representation who will look out for your best interest. Your lawyer would know how much you need and what to ask for. It’s in the lawyer’s best interests to ensure you get the compensation you deserve.

  1. Minimized Lengths Of Trials

Trials can cause stress to both parties. If cases have to proceed to court, the number of days they must be active has been reduced to only five days. In specific cases, parties can petition to extend the trial days. However, it will require some consideration, but the court is not obligated to grant those requests. At the same time, if you’re hiring a lawyer, you can also benefit from lawyers who offer flat-fee services to save on costs.

Defendants should know of this, and their lawyers must provide ample details that their clients can understand. In addition, it only applies to Rule 76 of the Rules of Civil Procedure which was amended and filed on October 23, 2019. The changes were to simplify court procedures in which jury trials will only proceed for litigation not exceeding USD$200,000.

  1. Drones Causing Injuries

Personal injury is not only limited to workplaces, establishments, and car accidents. With the recent popularity of recording videos or taking photos with drones, there have been reports of accidents caused by poorly piloted devices. Drones have also been misused for the invasion of privacy.

A few accidents involved a small drone that caused a power outage in California for 1,600 residents. There was also an incident where a restaurant customer in New York City was severely injured by a drone, resulting in a cut chin and sliced nose. Traumatic experiences can happen due to either reckless flying or product malfunction of drones.

Drones that are commercially used are not the typical toy that hobbyists use. These have sharp blades and can fly up to 50 mph, which can cause harm to anyone it comes in contact with. Those operating the drone, if it causes an accident and injures others, can be liable through negligence.

In Conclusion

These rising trends around personal injury cases are caused by specific behaviors, technology, and streamlining procedures. While some factors are about the causes of injury to victims, others are about making the process simpler and more accessible for those who need legal assistance. When you’re involved in a personal injury case, it’s beneficial to seek an experienced personal injury attorney to help you navigate your case, however unique.

 

 

Queen Elizabeth II, Britain’s Longest-Reigning Monarch, Dies At 96

Leaders in Law is deeply saddened to hear Queen Elizabeth II, the UK’s longest-serving monarch, has died at Balmoral aged 96, after reigning for 70 years. 

She died peacefully on Thursday afternoon at her Scottish estate, where she had spent much of the summer.

The Queen came to the throne in 1952 and witnessed enormous social change.

Her son King Charles III said the death of his beloved mother was a “moment of great sadness” for him and his family and that her loss would be “deeply felt” around the world.

He said: “We mourn profoundly the passing of a cherished sovereign and a much-loved mother.

“I know her loss will be deeply felt throughout the country, the realms and the Commonwealth, and by countless people around the world.”

During the coming period of mourning, he said he and his family would be “comforted and sustained by our knowledge of the respect and deep affection in which the Queen was so widely held”.

The King and his wife, Camilla, now Queen Consort, will return to London on Friday, Buckingham Palace said. He is expected to address the nation on Friday.

Senior royals had gathered at Balmoral after the Queen’s doctors became concerned about her health earlier in the day.

All the Queen’s children travelled to Balmoral, near Aberdeen, after doctors placed the Queen under medical supervision.

Her grandson and now heir to the throne, Prince William, and his brother, Prince Harry, also gathered there.

Prime Minister Liz Truss, who was appointed by the Queen on Tuesday, said the monarch was the rock on which modern Britain was built, who had “provided us with the stability and strength that we needed”.

Speaking about the new King, she said: “We offer him our loyalty and devotion, just as his mother devoted so much, to so many, for so long.

“And with the passing of the second Elizabethan age, we usher in a new era in the magnificent history of our great country, exactly as Her Majesty would have wished, by saying the words ‘God save the King’.”

The Archbishop of Canterbury Justin Welby – spiritual leader to the Church of England of which the monarch is supreme governor – expressed his “profound sadness”.

He said his “prayers are with the King and the Royal Family”.

Queen Elizabeth II’s tenure as head of state spanned post-war austerity, the transition from empire to Commonwealth, the end of the Cold War and the UK’s entry into – and withdrawal from – the European Union.

Her reign spanned 15 prime ministers starting with Winston Churchill, born in 1874, and including Ms Truss, born 101 years later in 1975.

She held weekly audiences with her prime minister throughout her reign.

At Buckingham Palace in London, crowds awaiting updates on the Queen’s condition began crying as they heard of her death.

The union flag on top of the palace was lowered to half-mast at 18:30 BST and an official notice announcing the death was posted outside.

On the Queen’s death, Prince William and his wife, Catherine, became the Duke and Duchess of Cambridge and Cornwall.

The Queen was born Elizabeth Alexandra Mary Windsor, in Mayfair, London, on 21 April 1926.

Few could have foreseen she would become monarch but in December 1936 her uncle, Edward VIII, abdicated from the throne to marry the twice-divorced American, Wallis Simpson.

Elizabeth’s father became King George VI and, at age 10, Lilibet, as she was known in the family, became heir to the throne.

Within three years, Britain was at war with Nazi Germany. Elizabeth and her younger sister, Princess Margaret, spent much of wartime at Windsor Castle after their parents rejected suggestions they be evacuated to Canada.

After turning 18, Elizabeth spent five months with the Auxiliary Territorial Service and learned basic motor mechanic and driving skills. “I began to understand the esprit de corps that flourishes in the face of adversity,” she recalled later.

Through the war, she exchanged letters with her third cousin, Philip, Prince of Greece, who was serving in the Royal Navy. Their romance blossomed and the couple married at Westminster Abbey on 20 November 1947, with the prince taking the title of Duke of Edinburgh.

She would later describe him as “my strength and stay” through 74 years of marriage, before his death in 2021, aged 99.

To mark their Diamond Wedding Anniversary on 20 November 2007, the Queen and Prince Philip re-visit Broadlands where 60 years ago in November 1947 they spent their wedding night

Their first son, Charles, was born in 1948, followed by Princess Anne, in 1950, Prince Andrew, in 1960, and Prince Edward, in 1964. Between them, they gave their parents eight grandchildren and 12 great-grandchildren.

Princess Elizabeth was in Kenya in 1952, representing the ailing King, when Philip broke the news that her father had died. She immediately returned to London as the new Queen.

“It was all a very sudden kind of taking on and making the best job you can,” she later recalled.

Elizabeth was crowned at Westminster Abbey on 2 June 1953, aged 27, in front of a then-record TV audience estimated at more than 20 million people.

Subsequent decades would see great change, with the end of the British Empire overseas and the Swinging ’60s sweeping away social norms at home.

Crowds outside Buckingham Palace on Thursday, after the death was announced

Elizabeth reformed the monarchy for this less deferential age, engaging with the public through walkabouts, royal visits and attendance at public events.

Her commitment to the Commonwealth was a constant – she visited every Commonwealth country at least once.

But there were periods of private and public pain.

In 1992, the Queen’s “annus horribilis”, fire devastated Windsor Castle – a private residence as well as working palace – and three of her children’s marriages broke down.

After the death of Diana, Princess of Wales, in a car accident in Paris in 1997, the Queen drew criticism for appearing reluctant to respond publicly.

There were questions about the monarchy’s relevance in modern society.

“No institution… should expect to be free from the scrutiny of those who give it their loyalty and support, not to mention those who don’t,” she acknowledged.

As a 21-year-old princess, Elizabeth had vowed to devote her life to service.

Reflecting on those words decades later, during her Silver Jubilee in 1977, she declared: “Although that vow was made in my salad days, when I was green in judgment, I do not regret nor retract one word of it.”

That same commitment to serving was made 45 years later in a thank you letter to the nation on the weekend of her Platinum Jubilee in June.

The milestone was celebrated with a mix of state ceremonies and a colourful festival of all things British, as well as lively street parties.

Although the Queen’s health kept her from some events, she said: “My heart has been with you all.”

In a moment met with cheers from huge crowds in the Mall, she was joined by three generations of her family on the Buckingham Palace balcony for the finale of a pageant.

Camilla, Duchess of Cornwall, Prince Charles, Prince of Wales, Queen Elizabeth II, Prince George of Cambridge, Prince William, Duke of Cambridge, Princess Charlotte of Cambridge, Duchess of Cambridge and Prince Louis of Cambridge on the balcony during the Platinum Jubilee Pageant on June 05, 2022 in London, England

King Charles, aged 73, becomes head of state in 14 Commonwealth realms.

He and his wife, Camilla, are at Balmoral alongside his siblings, Princess Anne, and Princes Andrew and Edward.

They are accompanied by Edward’s wife, Sophie, as well as Princes William and Harry.

William’s wife, Catherine, remained at Windsor with their children – George, Charlotte and Louis – as it has been their first full day at a new school.

The Royal Family has now entered a period of mourning. In the coming days, much of national life will be put on hold.

Official engagements will be cancelled and union flags will be flown at half-mast on royal residences, government buildings, across the Armed Forces and on UK posts overseas.

Members of Parliament will pay tribute to the Queen and take an oath to King Charles.

There will be church bells tolling and gun salutes as local and national organisations and charities organise ways to pay their respects, with commemorative events and books of condolence.

A state funeral for the Queen is expected in the next two weeks.

Foreign leaders have paid tribute to the Queen, with US President Joe Biden recalling how she stood in solidarity with the US in their “darkest days” after the 9/11 terrorist attacks.

To France’s president, Emmanuel Macron, she was a “kind-hearted Queen” and “friend of France”.

For Justin Trudeau, Canada’s prime minister, the Queen was a constant in Canadians’ lives and one of his “favourite people in the world”.

Reporting by George Bowden, Marie Jackson and Sean Coughlan, royal correspondent.

Article Source: The BBC

 

Clifford Chance Takes Next Step in European Strategy by Appointing New Regional Leaders

Leading international law firm Clifford Chance announces that Giuseppe De Palma and Matt Fairclough have been appointed Regional Practice Area Leaders Global Financial Markets for Continental Europe and the UK respectively, and Thomas Krecek as the firm’s Regional Practice Area Leader for Corporate in Continental Europe.

Charles Adams, Global Managing Partner of Clifford Chance said: “These new roles represent an important investment, which will continue strengthening our position as the leading global law firm in Europe. Giuseppe, Matt and Thomas are strongly positioned to advance our Global Financial Markets and Corporate practices in the region, enabling us to further build on our market leading offering for clients”.

Giuseppe De Palma has been Clifford Chance’s Managing Partner for Italy since 2014. He specialises in acquisition and leverage finance, real estate finance and debt restructuring. He advises international and domestic credit and private equity funds and banks on European high-profile transactions with significant structuring complexities and multiple sources of funding.

Matt Fairclough’s practice covers a broad range of debt and equity capital markets, advising on issuance of debt securities, equity-linked bonds, hybrid and regulatory capital products and on liability management. His clients include underwriters, corporate, financial institution and sovereign issuers and trustees. Matt helped to establish the firm’s Arcus LGBTQ+ and allies affinity network in Asia Pacific during his time working in Hong Kong and is currently the partner sponsor for the Arcus affinity network in the UK.

Thomas Krecek advises on domestic and cross-border transactions including acquisitions, dispositions, mergers, joint ventures and public takeovers, private equity investments with specific focus on financial institutions, as well as Franco-German transactions.

 

Commercial Litigation Team Joins Hogan Lovells San Francisco Office

San Francisco, 7 September 2022 – Global law firm Hogan Lovells announced today that Megan R. Nishikawa and Amber Trincado have joined the firm as commercial litigation partners in the San Francisco office. Nishikawa and Trincado, who join the firm from King & Spalding, represent clients in high-stakes litigation in industry sectors including energy and pharmaceuticals.

“We are very happy to welcome Megan and Amber, who are joining the firm at a time when we continue to build our litigation practice—particularly in strategic markets such as California,” said Des Hogan, global head of Hogan Lovells’ Disputes practice. Tom Connally, head of the firm’s U.S. Commercial Litigation practice area, added: “With their significant experience in product liability, toxic tort, environmental and other complex commercial matters, Megan and Amber are a great complement to our nationally recognized commercial litigation team, which represents clients in many of their most challenging matters, at trial and through the appeals process.”

Nishikawa focuses on defending publicly traded companies in complex commercial and high-stakes product liability matters, including toxic tort and environmental claims. She represents clients in the energy, chemical, consumer, and pharmaceutical industries nationwide in state and federal courts. She has extensive experience co-leading trials and litigating at the appellate level, and she has led large teams for some of the world’s top energy clients. Nishikawa has broad commercial litigation experience, including general civil and class action litigation.

“I am thrilled to be joining Hogan Lovells, which has such a strong global disputes practice, and is committed to growth in California,” Nishikawa said.

Trincado represents clients in the energy and chemical industries in state and federal courts throughout the country. She has broad complex litigation experience, with a particular focus on large-scale groundwater contamination, environmental exposure, and personal injury actions. She also advises clients on compliance with and implementation of California’s Proposition 65. She has extensive experience in the courtroom and managing large litigation dockets.

Trincado said: “It is an exciting time to be joining Hogan Lovells, which is so well recognized for  commercial litigation throughout the U.S. Megan and I are very happy to be part of this team.”

The addition of Nishikawa and Trincado is the latest in a series of strategic moves to strengthen Hogan Lovells’ presence in California. The firm will soon be officially opening  its new San Francisco office at 4 Embarcadero Center, occupying the 35th Floor and providing expansive views spanning from the Golden Gate Bridge to the Bay Bridge and beyond. The new San Francisco office follows the firm’s recent opening of its new Silicon Valley office in downtown Redwood City.

“We are delighted to welcome Megan and Amber to our growing San Francisco office,” said San Francisco Office Managing Partner Patrick Michael.  “The firm has prioritized California as a strategic growth market, and the additions of Megan and Amber, together with our new Northern California offices, demonstrates our commitment to continue investing in California and providing our clients with the highest level of service.”

The additions of Nishikawa and Trincado are the latest in a series of partners who have joined Hogan Lovells this year, in line with the firm’s focus on growing its presence in strategic markets such as California, New York, and Boston. In New York, six new partners joined the Corporate & Finance practice this year: Peter Cohen-Millstein, Megan Ridley-Kaye and Luke Iovine (all M&A), Adrienne Ellman (private equity, M&A), Parik Dasgupta (investment funds), and Jessica Millett (tax). In Boston, two new partners have joined this year: Alex Aber (M&A) and Chris Natkanski (IP transactions).

Nishikawa earned her J.D. from the University of Colorado at Boulder, and her B.A., English, from Macalester College, cum laude. Trincado earned her J.D. from the University of California Hastings College of Law, magna cum laude, and her B.A. from Sonoma State University, also magna cum laude.

 

DLA Piper Adds Blockchain Partner James Williams in the Firm’s Regulatory and Government Affairs Practice

DLA Piper continues to grow its Los Angeles office with the arrival of James Williams as a partner in the firm’s Regulatory and Government Affairs practice. Williams will be a member of the practice’s Financial Regulation & Technology subgroup, adding depth to the firm’s coast-to-coast blockchain and digital asset team.

Williams has extensive experience navigating the intersection of corporate, securities and intellectual property law in Web3.0 and crypto content transactions. He advises blockchain native companies on matters relating to venture financing, token generation events and airdrops, decentralized autonomous organization (DAO) structuring and formation, protocol design, and regulatory compliance with the Securities and Exchange Commission.

Williams also routinely acts as legal and strategic advisor to many of world’s well-known brands on crypto and blockchain integrations. He has represented numerous professional basketball, football and soccer teams on crypto naming rights deals, fan tokens, non-fungible tokens (NFTs) and Proof of Attendance protocols. His work for global consumer brands, entertainers and media companies includes all aspects of metaverse and NFT commercialization, from branding and smart contract design strategy to handling of all transactional aspects, including metadata design, NFT minting and marketplace partnership agreements.

“Expanding our capabilities in the blockchain and digital assets space is a strategic priority for the firm,” said Edward “Smitty” Smith, chair of the firm’s Regulatory and Government Affairs practice. “James’ diverse business and legal experience, coupled with his extensive SEC regulatory experience, will be critical in advising clients on the regulatory implications of using new tools and asset classes.”

Along with more than 20 years of legal experience, Williams has a diverse business background. He has served as the CEO of a global consumer brand, and an operating partner for a venture capital fund.

 

Dentons Strengthens Dutch Tax Practice With The Hire Of Partner Sebastiaan Wijsman

Amsterdam—Global law firm Dentons has strengthened its Tax practice in the Netherlands with the appointment of Sebastiaan Wijsman as a partner He joined the Amsterdam office along with associate Joost Boon on September 1, 2022.

With more than 17 years of tax advisory experience, Sebastiaan has built an excellent reputation as a leading lawyer with a particular focus on Dutch tax matters in the real estate sector. He started his career at Deloitte and then spent 12 years at DLA Piper, where he set up the VAT / Indirect Tax practice in the Netherlands. He advises multinationals, real estate funds and project developers on Dutch VAT, transfer tax, financing, tax due diligence, as well as other tax matters. He also has extensive experience in structuring complex real estate projects, joint ventures and investments. He frequently advises on the purchase and sale of real estate portfolios and the restructuring of real estate entities.

In addition to his qualifications as a tax lawyer, he has completed the prestigious Master of Real Estate from the Amsterdam School of Real Estate.

“We are delighted to welcome Sebastiaan,” said Benelux Managing Officer Marien Glerum. “His expertise at the intersection of tax and real estate will give both our growing Tax and Real Estate practice groups a significant boost. This expansion will accelerate our growth and development strategy and help us achieve our ambition to build a market-leading Tax advisory practice in Benelux and across Europe.”

Europe Co-head of Tax, Jurjen Bevers, said: “Despite being one of the smallest countries in Europe, the Netherlands is one of the most attractive places for international companies. Having a strong Tax practice here is indispensable in order to serve our global client base, and we are happy to be able to add this top legal talent to the team.”

Sebastiaan Wijsman commented: “As the world’s largest law firm, Dentons offers an unmatched platform to meet burgeoning client needs in an increasingly complex global tax and business landscape. The energy and drive in the Amsterdam office was obvious from the first conversations. I am really looking forward to using this positive momentum to support my clients on complex tax transactions and disputes, and ultimately help them achieve their business goals.”

Since entering the Dutch market five years ago, Dentons has more than doubled the size of its Amsterdam office in terms of both revenue and headcount. The Amsterdam office currently has 116 lawyers, civil-law notaries and tax specialists.

Dentons’ global Tax practice includes more than 300 lawyers and tax advisers worldwide, including more than 130 in Europe.

About Dentons

Dentons is designed to be different. As the world’s largest law firm with 20,000 professionals in over 200 locations in more than 80 countries, we can help you growprotectoperate and finance your business. Our polycentric and purpose-driven approach, together with our commitment to inclusion, diversity, equity and ESG, ensures we challenge the status quo to stay focused on what matters most to you. www.dentons.com

 

Establishing a Charity in Hong Kong – Part One

Demand for philanthropy planning has surged in recent years, especially since the pandemic’s harsh impact on society and livelihoods, with many enterprises, social organisations, religious groups and benevolent individuals seeking efficient, powerful, targeted ways to help socially vulnerable groups.

This series of articles provides practical information for those intending to engage in philanthropy and set up a charity in Hong Kong, presenting an overview of establishment requirements, organisational structures, compliance and governance, obligations and tax exemption.

Although there are no specific laws and regulations overseeing the registration and operation of charities, the Inland Revenue Department (IRD) provides essential guidelines in the Tax Guide for Charitable Institutions and Trusts of a Public Character, first issued in the 1980s.

This is revised from time to time to reflect changes in the tax environment and practical needs, providing updated guidelines on taxation and other related matters of charities or trusts. Its latest revision was updated in September 2021.

The first article in this series introduces basic requirements of establishing a charity in Hong Kong, and the different organisational structures that can be adopted.

Establishment Requirements

According to the latest guidance, the following three requirements must be met to set up a legal charity:

  • An institution or trust must be established solely for charitable purposes – charitable in the legal sense – and can be classified into four main purposes: (1) relief of poverty; (2) advancement of education; (3) advancement of religion; and (4) other charitable purposes that benefit society but do not fall into any of the preceding categories.
  • A charity must be set up for identifiable public benefit, and the beneficiary must be the general public.
  • A charity must abide by the law and bear the responsibility of safeguarding national security, and its resources must be used only for charitable work and not to engage in or support any acts and activities that are illegal or detrimental to national security. It is worth noting that this latest requirement is revised in response to implementation of the Law of the People’s Republic of China on Safeguarding National Security in the Hong Kong Special Administrative Region.

Structures of Charities

Before setting up a charity, the founder must clearly define the organisation’s purpose and clarify its organisational structure to be adopted, based on practical operation and purpose. Generally, charities can be divided into the following categories:

  • Charitable trust;
  • Society;
  • Corporation (including company limited by guarantee) established under the Companies Ordinance; and
  • Statutory body established in accordance with specific regulations.

A charitable trust is a trust established specifically for a charitable purpose, and its governing instrument is usually a trust deed that defines the purpose of the trust and the power of the trustee. A society is an unincorporated body formed by a group of voluntary members, bound by the rules in its articles of association.

On the other hand, the articles of association of a company limited by guarantee established under the Companies Ordinance limit liability of its members to the amount they undertake to pay as the assets of the company at its winding-up, and is therefore suitable for charities and non-profit-making organisations that do not require share capital and profit-sharing.

Judging from the actual operation of existing Hong Kong charities, most founders have chosen to set them up in the form of companies limited by guarantee.

The guidelines also mention that most of the charities recognised by the IRD for tax exemption are companies limited by guarantee. The reason for this is that, compared with the other structures, companies limited by guarantee have a certain degree of transparency increasing public confidence in their operation.

Among these reassurances are:

  1. Operations regulated by their articles of association, which clearly set out the rules related to the mode of operation and management, accessible to the public through the Hong Kong Companies Registry;
  2. They are required to keep and file audited annual financial statements, in accordance with the Companies Ordinance, and as a result financial statements are also available for public review, motivating proper accounts management; and
  3. With no need to share profits, the charity structure without share capital ensures they are not profit-oriented.

In addition, after choosing a name of the charity company, the founder only needs to submit an application form and Notice to the Business Registration Office to the Companies Registry, along with a copy of its articles of association, and pay the registration fee.

After the application is approved, the certificate of incorporation and business registration certificate can be obtained. Therefore, the process of setting up a company limited by guarantee is relatively simple, but it should follow another set of procedures to apply for tax exemption from the IRD.

Prior to setting up a charity, apart from establishing its general purpose, the organisation should take into account different operational and compliance considerations, including whether these meet all requirements set out in the guidelines, and understand the various applicable structures.

After confirming these requirements are met, the charitable organisation may move on to deliberate its governance policies. These relevant compliance requirements will be introduced and summarised in the next part of this series.

By Diane Fan

LC Lawyers LLP

 

Leaders in Law Global Awards 2022 – Sample Marketing Images

If you have been nominated for the upcoming Leaders in Law – Global Awards 2022, you will have the opportunity to promote your success in the upcoming publication. 

Please see the marketing images Global Awards 2021 winners where provided with last year:

 

If you would like to be considered or nominate an expert please visit our nominations page here.

You can view our previous winners by clicking here.

Each winning applicant will be promoted across all of our social media platforms please view our coverage last year on our Linkedin.

About Leaders in Law

Business today is fiercely competitive and ensuring the selection of a knowledgeable and cost-effective lawyer when and where you need them is crucial to business success. The Leaders-in-Law platform provides immediate access to Leaders in their practice area throughout the world.

Users of the Leaders-in-Law platform vary from large multi-nationals to successful entrepreneurs. All with one aim: to quickly and easily find the Leader-in-Law they need with the correct expertise in their location.

The selection process for Leaders-in-Law experts is rigorous and many applicants are eliminated during the vetting process. The successful experts who join the Leaders-in-Law all have a proven track record of success, with their own unique attributes and knowledge of their practice area and local requirements.