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Difference Between Shareholders And Directors In A Hk Company

By Author: jvchk
Total Articles: 77

Hong Kong is a business hub in the world currently. Its flexible policies and rules have attracted investors from around the world who are interested in trying out the market. Hong Kong company incorporation basically requires at least one shareholder and a director in order to commence its operations. The duties of a shareholder and directors are different in an organization. The rights and obligations they exercise are highly distinct in nature. Their role is crucial to the regular operation of the business as well as in making every other decision that affects the future of the company.

Following are a few points that describe and compare the role of a shareholder to a director in the context of HK company formation:

1. A shareholders’ duty is to take part in business meetings, vote in proportion of shareholding and understand the financial conditions of the company. A director is not involved in such high profiles tasks and generally takes care of the ordinary operations and decisions of the company.
2. A shareholder can employ or dismiss directors, decide their remuneration, and determine their role in the company. The authority of employment in case of directors is limited to the candidates coming under the lower and middle hierarchy of the company.
3. A shareholder can elect or get elected to the position of the director. He can be act as both at the same time also. However, if the director and the shareholder are two different persons, he cannot be the acting shareholder of the company in any instance.
4. The duty of a shareholder is to obtain dividends while directors are involved in keeping accounting and business records up to date. Directors are involved in taking care of various financial obligations such as bank account management, loan securing, profit distribution, etc.

It is better to have two different persons for these two crucial positions in your company. There are a lot of responsibilities in a corporation service company and having only one person attending all of them will be too much to handle. Employing different professionals for each particular job ensures the smooth running of the business. If you are operating two limited companies in Hong Kong, then one can easily act as the shareholder or the director of the other company. This will make the task not only easier, but cost effective. A limited company formation generally requires at least one person that can play the role of both these personalities.

To make your business transactions easier and faster, take the help of business consultancies. These are groups that will do all the legwork and you can incorporate HK Company without any hassle. They have all the sources and knowhow that can help you in taking care of every responsibility during the formation. You can completely rely on them for all the major and minor formalities that arise during the incorporation. All you have to do is to supply the necessary documents and leave the rest on them.

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