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미래전략 연구소2020-08-05T16:50:09+09:00

Hong Kong 2020 Limited Company vs Unlimited Company

Date
2020-07-10 12:38
Limited Company vs Unlimited Company

For a new start-up business, the owner may consider the type of business entity and depend on a few common factors, like liability, taxation, and record-keeping.

 

Unlimited company – a total of 2 types of business entity: Sole Proprietorship and Partnership. One common reason to set up an unlimited company is the owner may not wish to public the accounts.

 

Limited company – separate by a few types of business entity: a private company limited by shares, a public company limited by shares, a company limited by guarantee. There is no restriction on the nature of a person who would like to register a company like overseas corporate would like to be a member of the company. Also, the investor may minimize his liabilities are limited to the value of the shares.

 

The following to compare the Limited Company and Unlimited Company.
 

Limited Company

Unlimited Company

No. of owner

1 to 50 (Private company)1 (Sole Proprietorship)

2 to 20 (Partnership)

Separate legal entity

YesNo

Liability

Limited liability of the shareholders which their invested amount of the shareholding.Unlimited liability of the owner and all liability should bear by the owner personally.

Close down company

Time-consuming and complex, by 2 different ways:

1)     Deregistration of a Defunct Solvent Company

2)     Winding up a company in Hong Kong
Sole Proprietorship – less complex and less time consuming

 

Inform Inland Revenue Department upon cessation of business

Perpetuity & Succession

Enduring StructureNo perpetual succession

Annual Renew

Inland Revenues Department - Business Registration Certificate

Company Registry - Annual Renewal
Inland Revenues Department - Business Registration Certificate

 

Audit

Annual statutory audit is requiredNo statutory audit is required

Tax rate

Standard rate – 16.5%

2-tiered rate

8.25% on assessable profits up to $2,000,000; and 16.5% on any part of assessable profits over $2,000,000
Standard rate – 15%

2-tiered rate

7.5% on assessable profits up to $2,000,000; and 15% on any part of assessable profits over $2,000,000

Ownership transfer

Easy to transfer/ allot share to new shareholderOnly by the sale of individual business assets

Government Department

Company Registry

Inland Revenue Department
Inland Revenue Department