How Does a One-Person Hong Kong Company Work? Shareholder, Director and Company Secretary

At a glance

What people get wrong is not the shareholder or director boxes — it is the company secretary. They assume one person forming a company handles everything, and only discover at the appointment stage that the law does not allow you to appoint yourself.

Can one person be both sole shareholder and sole director?

Yes, and it is very common. Section 457(2) only requires every private company to have at least one director who is a natural person, with no additional requirement that the director not be a shareholder. So holding all the shares and also acting as sole director works perfectly well.

But keep the two capacities distinct. A shareholder owns the company and decides on shares and major matters; a director manages it and carries the statutory duties. Even where it is the same person, they remain two roles in law — passing a resolution as shareholder and signing documents as director are two different acts, and the records should be kept separately.

Why can’t you take on the company secretary role too?

Because section 475(2) is explicit: the sole director of a private company may not also act as that company’s company secretary.

The drafters also anticipated the workaround. Section 475(3) adds a further layer: where a private company has only one director, its company secretary may not be a body corporate whose sole director is that same director. Setting up a second company, making yourself its sole director, and using it as the first company’s secretary does not work.

So a one-person company has two routes: find someone you trust (a family member, a partner) to take the role, or appoint a firm that provides company secretarial services. On what the role actually involves and how far its responsibilities go, see the duties of a company secretary.

How does one person “hold a meeting”? What makes a resolution valid?

The good news is that you do not have to sit in a room holding a meeting with yourself.

Section 612(2)(a) provides that a single member company is not required to hold an annual general meeting; and under section 612(1), where everything that would have been dealt with at an AGM has been dealt with by written resolution, no meeting is required either.

But “no meeting required” is not “nothing to do”. Once a written resolution is passed, the company must notify every member and the company’s auditor within 15 days. For a one-person company “every member” is you — but the auditor cannot be skipped, and this is the step most often missed. The resolution needs a date and content and has to go into the company records; saying “let’s do that then” in a WhatsApp message does not count. For the annual filing duties, see the guide to the annual return NAR1.

If you are not there, does the company stop?

This is the most practical risk in a one-person company: you are the only person who can sign anything.

Section 455 provides a safety net — where a private company has only one member and that member is also the sole director, the company may by resolution in general meeting nominate a person aged 18 or over, not being a body corporate, as a “reserve director”. If the sole director dies, the reserve director takes over acting immediately.

Two points to note. First, it takes effect only on death — not when you travel, go into hospital or become uncontactable, so day-to-day cover has to be arranged separately. Second, a nomination can lapse: if the nominee resigns under section 464 before the sole director dies, if the company revokes the nomination in general meeting, or if the sole director ceases for any reason other than death to be the sole member and sole director, the nomination falls away. So it needs revisiting whenever the structure changes.

What happens to the company if the sole shareholder dies?

This is the most easily overlooked item, and the one with the largest consequences.

Under the Companies Registry’s model articles, on the death of the sole shareholder the company may recognise only the deceased member’s personal representative (the executor or administrator of the estate) as having any title to those shares. The successor has to establish their entitlement as the directors require, and only then can elect to become a shareholder themselves or transfer the shares to a third party.

In other words, nobody takes over the company simply by being family. The estate process has to run its course, and during that period the company effectively cannot be changed. How long that takes has no official timetable; it depends on the individual estate.

The preparation is not complicated: nominate a reserve director, set out the shareholding structure and articles clearly, keep the company records somewhere they can be found, and think seriously about whether one person really should hold all the shares. On how to divide the shareholding sensibly, see designing the share capital structure.

Forming a company alone does not mean running it alone

The advantage of a one-person company is speed — decisions made without consulting anyone. The cost is that every statutory duty, deadline and record sits with the same person, and the law already requires you to have at least a company secretary.

AIcountant is a licensed Hong Kong TCSP, and can set up formation, company secretarial work and annual filings in one arrangement — including prompting you on details like the reserve director and resolution records. Ready to start? Get started. Still have questions? Talk to us.

The provisions and requirements described here are as set out in the Companies Ordinance (Cap. 622) and as most recently published by the Companies Registry. On individual matters such as succession to shares and estate arrangements this is not professional advice; please consult a professional.