When Can The Public Register Of A Company Be Corrected?

What can be done if the public register of a company with the Companies Registry in Hong Kong is incorrect? Carol Ling from the Corporate Commercial practice group of Tanner De Witt reviews some of the guiding principles.

This can be an important issue. What if the Companies Register states that you are a director, when you are not? Or states that you resigned as a director on a date in 2020, when you resigned on that date in 2019? Mistakes and incorrect information on the Companies Register can lead to loss. There is a process though for factually incorrect information on the Companies Register to be rectified or removed. Here are the key principles[1]:

1. The Registrar may on his own volition rectify a typographical or clerical error. Otherwise, an application to Court will be needed.
    
2. Anyone may apply to the Court for an order to direct the Companies Registrar to rectify or remove information if the information is factually incorrect or derives from anything that is incorrect.
    
3. Rectification is different from removal. Rectification means that a document amending the incorrect information will be filed on the Companies Register. The old document containing the incorrect information will remain on the Companies Register.
    
4. Removal is more difficult to be approved. There are two extra hurdles. First, the applicant must prove rectification is not sufficient and material damage will be caused even if a document showing rectification is registered. Then, the applicant must show that the interests in favour of removing the information outweigh the interests of other persons in the information continuing to appear on the Companies Register.

This is a common issue that appears before the Courts in Hong Kong, including a case reported earlier this month. Here are some brief summaries of recent cases:

Yuen Kin Kwan v Sino Insurance Brokers Group Ltd [2020] HKCFI 284: Ms. Yuen applied for removal of documents which incorrectly showed that she was appointed as the company secretary and the authorized representative of two companies. Although the Court accepted Ms. Yuen’s case, the Court refused to grant an order for the removal of the documents. Ms. Yuen argued that if the documents were not removed, the companies would give a bad impression to potential business partners for hiring unqualified officers. The Court believed that the impression would not persist because rectification to the documents would show that Ms. Yuen was never appointed. In addition, the effect of rectification was the same as removal.

Forever Up Holdings Ltd v Tong Yan Wa [2018] HKCFI 2775: The company applied to remove documents (“False Notices”) that were filed by Mr. Tong, a convicted criminal, which appointed himself to be the sole director of the company, as well as documents filed by the company (“Remedial Notices”)in an attempt to undo the registration of the False Notices. The Court held that the False Notices gave the public the misguided impression that a convicted criminal was once a director of the company. They also gave a misguided impression to the public and potential business partners that the company was suffering management problems. The Remedial Notices mistakenly endorsed the fact that the convicted criminal was once a director of the company. An order was granted for the removal of both the False Notices and Remedial Notices.

Re China Nice Education Research Publishing Investment and Management Co Ltd [2016] 3 HKLRD 525: The sole shareholder and director of the company sought an order to remove certain documents containing incorrect information, which were filed without the company’s authority. The documents included: Notice of Change of the Company Secretary, Notice of Change of the Company’s Registered Office, Annual Return incorrectly stating the name of the Company Secretary, and a Return of Allotment. The Court only allowed for the removal of the Return of Allotment. This was because the company had recently entered into negotiation with potential investors for the injection of capital. The Court was of the view that the continued presence of the Return of Allotment might suggest there was a dispute, and this may deter investors.

Our key recommendations to persons who are seeking to correct information on the Companies Register are:

1. Consider whether the incorrect information can be characterized as a typographical or clerical error. If so, the Registrar may correct the information without the need to apply to Court.
    
2. If an application to Court is needed, consider whether an order for rectification of the Companies Register will be sufficient. This will mean the incorrect information will remain public, but the subsequent amending document will be filed too.
    
3. Remember an application for an order to remove documents or information from the Companies Register is more difficult.

Carol Ling

If you would like to discuss any of the matters raised in this article, please contact:

Pádraig Walsh Partner | E-mail

Eddie Look Partner | E-mail

Tim Drew Partner | E-mail

Edmond Leung Partner | E-mail

River Stone Partner | E-mail

Disclaimer: This publication is general in nature and is not intended to constitute legal advice. You should seek professional advice before taking any action in relation to the matters dealt with in this publication.

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[1] Section 42, Companies Ordinance (Chapter 622, Companies Ordinance)