How to Issue New Shares in a Hong Kong Company (Form NSC1)

Steps

1. Check authority: the articles and the Ordinance may require member approval before directors allot shares, and existing shareholders may have pre-emption rights (the right to buy new shares first) under the articles or a shareholders' agreement.
2. Directors pass a resolution to allot, setting the number of shares, price and allottees.
3. Record the allotment in the register of members and issue share certificates as required.
4. File Form NSC1 within one month of the allotment. It includes the allotment details and a statement of capital showing total share capital at that date.
5. Pay the Registry fee shown in the Registry's price list (cr.gov.hk/en/services/fees.htm).

Penalty for late filing The Registry's pamphlet states a maximum penalty of HK$25,000 for each breach plus a daily default fine of HK$700.

Exceptions

• Shares issued to founder members who signed the articles on incorporation do not need an NSC1.
• Transfers between shareholders are not reported on NSC1; they appear in the next annual return.

Check also Allotting shares can change who is a significant controller, so update the significant controllers register.