Director Prosecution in Hong Kong: Handling a Summons

At a glance

The procedures and penalties are as set out in the Companies Ordinance and the Inland Revenue Ordinance and most recently published by the Judiciary.

Why does a summons arrive?

Not because you missed one filing. It is usually a chain: a document falls due and is not filed → a notice is sent and not answered → another notice is sent and still not answered → prosecution.

That process can run for a year or two. And many owners have no idea it is happening, because every letter goes to the registered address.

If you moved office without filing the change, or terminated your company secretary’s service without updating the address, those letters go somewhere nobody reads. In law, sending them to the registered address means you received them, and “I didn’t know” is not a defence.

So the first practical lesson is: somebody has to actually read the post at the registered address. See the statutory requirements for a registered office.

The company is charged — why am I charged as well?

Because the law places the duty on both the company and its “responsible persons”.

Directors run the company, and the law requires them to ensure the company meets its filing obligations. Fail, and the director is themselves one of the offenders — this is not “the company’s problem, nothing to do with me”.

It is also outside what “limited liability” protects — limited liability covers the commercial risks of ordinary trading (trading losses, customers who do not pay), not failure to discharge statutory duties. For where the boundary sits, see how far a director’s personal liability reaches.

What happens on the day?

The case is heard in the Magistrates’ Court. You can appear in person or instruct a solicitor.

If you intend to plead guilty, several things are worth preparing:

One: file as much as you can beforehand. Having filed the outstanding documents before the hearing is a favourable factor — it shows you have already put it right. Do not wait until after sentence.

Two: be ready to explain how it happened. Not a performance in mitigation — simply letting the court understand the background (letters going to an old address, a period of operational difficulty). Say it honestly.

Three: work out in advance how you will pay the fine. The next section covers this.

The trap most people fall into: the court does not send a payment notice

This deserves its own section, because it can cost a lot.

After sentence, the court does not send you a bill. The amount of the fine and the deadline for payment are set out in the magistrate’s decision when sentence is passed — you have to listen carefully, note it down, and pay at the relevant court’s shroff before the deadline.

Assuming “I’ll wait for the bill” and missing the deadline can lead to further consequences.

If you cannot pay it all at once: when passing sentence, the magistrate will generally ask when you can pay. That is the moment to ask for an extension of time or for payment by instalments.

The key is to speak up. Say nothing and it is assumed you can pay.

Fine paid — is that the end of it?

No. This is the other common misunderstanding.

The fine punishes the offence of not filing. The documents that should have been filed — the annual return, the tax return — still have to be filed.

And the late registration fees, the unpaid tax and any surcharge are separate amounts again; they are not set off against the fine.

So the right move after conviction is: file everything outstanding straight away, then take a view on the company as a whole — carry on trading, or in fact go through a proper deregistration.

What effect does it have going forward?

A director with a conviction record may have to account for it in situations such as:

• Incorporating a new company, or acting as a director of another company
• Applying for certain licences
• Opening a bank account or a credit application
• Due diligence for some commercial partnerships

The effect is usually not “barred for life”, but it does get asked about. Which is why dealing with it before prosecution is always better than explaining it afterwards.

On the remedies available before it reaches this stage, see what to do about a late annual return.

If a summons arrives, do not put it aside

This is not like a tax bill — there is a court date, it does not go away by itself, and failing to appear is a separate problem in its own right.

Received a summons, or suspect you have documents long overdue? Talk to us — we can take stock immediately of what is outstanding and what has to be filed. On the hearing and any defence, you should also consult a solicitor.

This is general information and does not constitute legal advice. A case already under prosecution involves criminal procedure; consulting a solicitor is recommended. Procedures and penalties are as set out in the relevant legislation and most recently published by the Judiciary.