Legal Opinion on Company Compliance in Hong Kong
I. Listing of Mainland Companies – Compliance Opinions for Hong Kong Affiliated Companies
In the process of listing or listing on the National Equities Exchange and Quotations (NEEQ) of the Mainland, the listing documents will need to disclose the main body, existence and legality of all overseas associated companies of the listed entity. For the associated companies of the listed entity located in Hong Kong, it is necessary to engage a Hong Kong law firm to conduct due diligence on the Hong Kong company and issue a legal opinion.
Due to the close economic ties between Hong Kong and the Mainland, many Mainland companies have associated subsidiaries or parent companies in Hong Kong for business purposes. When a Mainland company is preparing for listing on the NEEQ, the verification of the Hong Kong company usually involves the issuance of a legal opinion by a Hong Kong law firm.
II. Due diligence by Hong Kong lawyers for the purpose of issuing legal opinion
In order to issue legal opinions, Hong Kong lawyers usually need to conduct due diligence on Hong Kong companies. The scope of due diligence usually includes: (1) searching documents filed in the Companies Registry; (2) searching business registration certificates of the company; (3) enquiring whether the company is involved in litigation in Hong Kong; (4) searching whether the company is involved in any insolvency proceedings; (5) conducting searches on the registration of immovable property (if any) held by the company; (6) conducting searches on trademarks, patents, etc. held by the company.
In the course of due diligence, the company may be required to answer due diligence questionnaires to clarify certain issues as necessary.
III. Scope of Legal Opinions Issued by Hong Kong Lawyers
The scope of legal opinions issued by Hong Kong lawyers for Hong Kong associated companies may vary according to the requirements of the client. Usually, it will include the following aspects:
(1) Basic information about the Hong Kong company
Including basic information such as its name, address, date of incorporation, shareholders, share capital, directors, etc.
(2) Qualifications of the Hong Kong company’s principal
Whether the Hong Kong company is legally established, legally subsisting or not, and whether it has independent principal qualifications, etc.
(3) Scope of business
What is the scope of business of the Hong Kong company and whether it has obtained the necessary qualifications, permits and licences to engage in its business.
(4) History
Historical changes and history of the Hong Kong company since its incorporation in terms of the entity, shareholders, shares, directors, company secretary, etc.
(5) Shareholding structure
Historical changes in shareholders, shareholding structure, types of shares and shareholding structure of the Hong Kong company. Whether the shares held by the shareholders were legally acquired and whether the formalities are complete; whether the shareholders’ shareholdings are mortgaged, pledged or subject to any other rights impediment.
(6) Company assets
Whether the Hong Kong company holds any assets such as immovable property, movable property and intellectual property rights. The ownership of such assets.
(7) Significant debts and liabilities
Whether the Hong Kong company has any material debts.
(8) Litigation, arbitration and administrative penalties
Whether the Hong Kong company is involved in any litigation, arbitration or has received any other administrative penalties.
(9) Employment of labour
Whether the Hong Kong company is legally compliant in the employment of labour and whether it has received any penalties.
(10) Taxation
Whether the Hong Kong company has paid tax legally and fulfilled its tax liabilities and obligations.
The scope of legal opinions issued by Hong Kong lawyers listed above is not exhaustive and may be increased or reduced according to the needs of clients.
IV. Legal Opinions Issued by Hong Kong Law Firms
Yan Lawyers is a law firm specializing in Hong Kong and Mainland China law, and has issued legal opinions for many Hong Kong companies involved in Mainland China’s IPOs, listing on the NEEQ or share issuance projects.
V. Time and cost of issuing legal opinions
Yan Lawyers issues legal opinions for Hong Kong companies involved in the listing of mainland companies and the listing on the NEEQ, and the time required is generally one to two weeks. Depending on the specific work, the fee is generally between HK$20,000 and HK$30,000, and the fee is subject to change.
Please contact Yan Lawyers for a consultation on due diligence and legal opinions for Hong Kong companies.