When you ask for Hong Kong company formation services including shares or share capital, or how to establish a company in Hong Kong you need to know what is a share. A share or share capital is defined as the amount of money or property or anything of value, which a person has invested in a company. A company may include more than one shareholder at the same time. The more people which are ready to invest in the company, more will be the assets of the company and more easily it can make investments for the future.

Since, while dealing with the issue of a whole company, how to establish a company in Hong Kong, the shares, transfers and investments made in the company amount to a lot of money. So, there are specific rules and regulations in the country’s constitution which must be followed in order to keep the money transfers under check and to ensure that the revenue is invested or transferred where there is a real need for investment. It is also vital that the shares do not fall in deceitful hands or else, it will cost the company a great deal. This is important information worth knowing if you want to know how to establish a company in Hong Kong.

When you also ask for Hong Kong company formation services including shares transfer services. You need to know what is it. Share Capital Transfer of shares basically means the transfer of shares, willingly, from one party to another, without any pressure or force. The transfer of shares usually takes place when the person who had invested in the company cannot be personally present to overlook the issues in the company. This happens when the company is near bankruptcy, the member ceases to live or there is an issue with his brain that does not let him think straight.

The factor of transfer of shares in such a case save the company from some act which could be committed on the behalf of the person who is not in the state to refuse. Since, again, this is a matter of a large sum of money, the law intervenes and has given us a set of rules and regulations, which must be followed in the case of transfer of shares.

Below is the detail of such rules:

Instrument of transfer requirement:

The company can not register any transfer of fund unless a proper channel and a proper procedure is followed during the transfer. Under the table matters are not to be registered by the company.

If, however, the shares have been transmitted by the operation of law, then the company has to register the transfer even if it is unwilling to do so. This act does not breach the above mentioned condition.

Transfer or Refusal of Registration:

When a transfer is taking place, both the parties, that is, the transferor and transferee can lodge the transfer with the company. That is, they can claim that they have successfully transferred the shares and the new information is now registered in the company. In easy words, the company knows about the transfer.

Within 2 months when the transfer is lodged with the company, the company must either register the transfer in its accounts or it must send a notice of refusal to both the parties, that is the transferor and the transferee stating that the transfer was not registered in the company.

If a company refuses to register its transfer, either of the both parties can make a request for the reasons for refusal of registration. This is so because the law provides everyone with the right to know why there was a rejection in their approval.

If such a request, as mentioned above, is filed, the company has an obligation to send the concerned person a statement of reasons or to register the transfer. The time limit for this is 28 days since the day the request was filed.

If a company violates the above mentioned conditions, then the company as a whole and all the members of that company are liable for breaching the law and have committed offence. There is a level 4 fine upon breaching the section. If the company still continues to refuse giving any reason or registering the transfer, a further fine of 700 dollars per day is applicable to the company during the period that they continue to commit offence.

Court Orders for Registration:

if a company refuses to register the transfer, the transferor or the transferee can apply in the court for an order under this section. This will compel the company to register the transfer.

Under such application, the court may order the company to register the transfer if the applicant has satisfied the court that his appeal is legitimate and the application is well-founded.

Use of personal representative for transfer:

A transfer of shares or any other interest and investment of a deceased member of a company by his personal representative is valid only if the representative is in the books of the company as the ne to represent the person under question. If the person is known, then the transfer is deemed valid and is rendered useless in any other case.

Certification of Transfer:

Certification is actually the proof by the company that if a transfer took place, it has been registered in the accounts of the company. It is the representation by the company that the transfer documents provided to the company have the name and consent of the transferor present on them. In addition, they are not a representation that the transferor is any longer entitled to the shares that have been transferred.

If a person believes an unintentional certification by a company which has been falsely published, the company is liable to the person in the same manner as if it were the one responsible for fraudulent dealings.

The instrument of transfer is only legitimate it of bears:

• The words “certificate lodged”, or the words which are synonymous to them, either in English or Chinese

• Under these words, a definite signature or the initials of the representative of the company must be present, who is responsible for overlooking the transfers.

Unless proved otherwise, the signature and initial must be dealt in the same manner as they were of the real person. The law will come into action only when the signatures are found to be forged.