Limited Company is the most popular form of business organization in Hong Kong. So a common interest in the nature and legal aspects of limited companies is quite natural.
What types of limited companies are there?
There are three different types of business organization in Hong Kong, they are:
As implied by its name, this is a business owned by one person. In simple terms – it’s all on you: resources, profits, risks, etc. There are no specific registration requirements for this type of business. There is no need to registry with Companies Registry. What you need is to obtain a business registration certificate, by completing Form 1(a) within one month of commencement of business.
This is a business owned by at least 2 (but no more than 20) partners. The partners share resources and profits and equally liable for the debts of the company.
Note: in case of unlimited company at least one partner should bare unlimited liability.
There are no restrictions on partnership’s business unless it is illegal. A business registration certificate by submitting Form 1(c) must also be obtained within one month of commencement of business.
If a limited company consists of more than 20 people, it must be registered with the Companies Registry.
The law governing the legal requirement of a limited company in Hong Kong is the Companies Ordinance (Cap 32). This is a company formed and registered under the Companies Ordinance with Companies Registry (Section 2).
So what is a registered company?
It is a separate legal entity distinct from its members. This point needs to be emphasized, as the company has perpetual succession, unaffected by the change of its membership, or the death, bankruptcy or mental disorder of any member. The company’s debts are not enforceable against its members. It will continue in existence unless it is dissolved by court or by liquidation.