SGP

Company Formation
회사 설립 서비스 – 홍콩 [회사의 종류 및 설립절차]2020-07-21T12:26:32+09:00

Sole Proprietorship

A sole proprietorship is especially for a very small-scale business for one-man only, like a grocery store.

Advantages of Sole Proprietorship
Simple to set up the only thing is to apply for a business license from the Business Registration Office. Every person carrying on a business shall make such an application within 1 month of the commencement of such business.
Profits entitlement The sole proprietor does not need to share the profits with other people. He gets all the profits of the business, which provides a good incentive for him to work hard.
Lower profits tax rate The profits tax rate for a sole proprietorship is 7.5% – 15%. which is lower than a limited company.
Disadvantages of Sole Proprietorship
Sources of finance The sole proprietor will have difficulty in sourcing additional finance. Unless he has adequate finance in setting up and running the business, he needs to be cautious in managing the finance to avoid the occurrence of liquidity problem in the course of business.
Heavy workload To save expenses, a sole proprietor does not usually have many employees and he often works in the business. A sole proprietor to have a higher workload and difficult to make decisions efficiently. Meanwhile, transfer ownership is impossible whichever difficult business environment or worse personal condition.
Unlimited personal liability it is risky to run sole proprietorship business because the sole proprietor has unlimited liability to its business.

The sole proprietor shall bear all the losses resulting from the business. It can be a great psychological and economic pressure on him when the business is slipping down.

Procedure for Setting up a Sole Proprietorship

Setting up a sole proprietorship in Hong Kong is simplest.

The only requirement for Hong Kong sole proprietorships is to register their business with the Inland Revenue Department’s Business Registration Office and obtain a Business Registration Certificate. Business Registration must be done within one month from the date of commencement of business.

The business registration number that appears on the Business Registration Certificate is also the sole proprietorship’s profits tax filing number.

In order to register a sole proprietorship business in Hong Kong, the following documents/information are required.
  • Complete application form, including proposed business name and date commenced
  • Hong Kong identity card

Partnership

This business structure allows two or more people to carry on a business in common with a view of profit.
There are two types of Partnerships in Hong Kong and governed by the Partnership Ordinance(Cap. 38)

General partnership All the partners are general partners and have unlimited liability.
Limited Liability partnership Includes one or more limited partners but they‘re not able to participate in the management.

However, there must be at least one general partner with unlimited liability. He has unlimited liability for the firm’s debts and is responsible for the day-to-day running of the business.

It’s commonly used by the professional, like solicitor – law firm or in small scale business form. The maximum partners are 20, except for solicitors, accountants, stockbrokers, or any other professions, vocations and businesses approved by the Chief Executive in Council.

Advantages of Partnership
Division of labour Each partner can contribute their own specialized knowledge and ability to the business.
Sharing business risk The business risk will not be borne by one person only and easier to raise the capital from other partners.
Lower profits tax rate The profits tax rate for a Partnership is 7.5% – 15%, which is lower than a limited company.
Disadvantages of Partnership
No separate legal existence A partnership is not a legal entity, still an unlimited liability to the general partner.
Bound by the decisions of others All partners are bound by the decisions made by anyone of the general partner. A poor decision made by one general partner will affect the whole business.
Procedure for Setting up a Partnership

Business is conducted under a partnership agreement/deed must be registered with the Business Registration Office of Inland Revenue Department of Hong Kong, within 1 month of the commencement of the business.

Once you have registered your business, you must display your Business Registration Certificate at your place of business.

In order to register a partnership business in Hong Kong, the following documents/information are required.
  • Complete application form, including proposed business name and date commenced
  • Hong Kong identity card

Private Company Limited

Company Limited by Shares

A private company limited by shares is the most common type of company incorporated under the Companies Ordinance of Hong Kong. The liability of the shareholders of “Company Limited by Shares” to creditors of the company is limited to the capital originally invested.

Procedure for Setting up a Limited Company by Shares

For company registration/ incorporation part, you don’t need to visit Hong Kong; we can prepare and send you the requisite documents by email and arrange relevant filing on your behalf.

Tailor-Made Company
E-registration(Online Submission)
The company will be incorporated with your preferences name and we can get the Certificate of Incorporation and Business Registration Certificate within 2~3 hours under the following conditions

  • The Proposing Company will be incorporated with Individual Director & Shareholder
  • Receive Notarized Certify True Copies of Original & Valid Identification Documents of Director & Shareholder by Notary Public in your country or Receive Certified True Copies by Hong Kong Certified Practicing Accountant/ HK Lawyer
Traditional Way(Paper Submission)
The company will be incorporated with your preferred name, the incorporation process will normally take 6 working days for a Certificate of Incorporation to be issued.
Ready-Made Company
(Shelf Company)
If you don’t have a preference on the company’s name, you can make choice from a shelf company list and use it immediately, everything can be done within 2~3 days.
Company Limited by Guarantee

A Company limited by guarantee is not able to authorize the payment of a dividend or to distribute profits to its members, either by way of a provision of its articles of association or by way of any resolution passed. It is requiring to arrange annual audit and filing of annual return and other reports/returns as requested by other government offices.

Procedure for Setting up a Limited Company by Guarantees

Hong Kong Company limited by guarantee without share capital is mainly established for the following purposes: –

  • Relief of poverty;
  • Advancement of education/training (like association or society);
  • Advancement of religion;
  • Environmental protection;
  • Trust and foundation, and
  • Betterment for the community.

Public Limited Company

A Hong Kong Public Limited Company is limited by shares. It allows to:

  • offer its shares and debentures to the public;
  • have more than 50 shareholders and on maximum restriction; and
  • have no restrict right to transfer its shares.
Advantages of Public Limited Company
Easier to raise capital Ability strength to raise capital and attract the investors when compared to private limited company/partnership/sole proprietor company.

If the company goes listing, more generic strategies for raising capital on the stock market.

Good Prospectus It is optional to go IPO process and list on The Stock Exchange of Hong Kong Limited (HKSE)‘ s Mainboard or GEM board.

Companies listed on the HKSE are regulated by the Rules Governing the Listing of Securities on the HKSE (Listing Rules) and the Codes on Takeovers and Mergers and Share Buy-backs.

Disadvantages of Public Limited Company
Increase Rules and Regulations oversight Hong Kong Public Limited Companies raise funds from the public and are therefore subject to stricter rules and regulations.
Higher levels of transparency required Hong Kong Public Limited Companies is mandatory to disclose accounts information every year.
Procedure for Setting up a Public Limited Company

The company will be incorporated with your preferences name and following documents to be required of all relevant parties:-

Receive Notarized Certify True Copies of Original & Valid Identification Documents of Director & Shareholder by Notary Public in your country; or
Receive Certified True Copies by Hong Kong Certified Practicing Accountant/ HK Lawyer (If you can visit us in person, Korchina TNC can provide such service).

We can assist with you to understand more the requirements and procedure of setting up this type of company, please feel free to talk with our specialist.

Branch Office

A place of business in Hong Kong which is established by a foreign company (i.e. a company incorporated outside of Hong Kong) must register as “Registered Non-Hong Kong Company” under Part 16 of the Companies Ordinance (Cap. 622), within 1 month after establishment. It is advisable to apply before business commences.

Documents required for registration as “Registered Non-Hong Kong Company”
  • A certified copy of the Memorandum and Articles of Association (or charter or statutes) of the company;
  • A completed “Application for Registration as Registered Non-Hong Kong Company” Form which includes particulars of the company;
  • A certified copy of the company’s certificate of incorporation (or equivalent);
  • A certified copy of the latest accounts of the company; and
  • A Notice to Business Registration Office

If the certificate of incorporation or equivalent is not in English or Chinese, please note that it is required to deliver a certified copy of the certificate in the original language and its certified translation in English or Chinese for registration.

Upon receipt of sufficient documents, normally it takes around 14 working days to issue a Certificate of Registration in Companies Registry.

Representative Office

A representative office is not a separate legal entity but rather an extension of its parent company.

It is an office established by a company which is registered in a foreign country, to act as a liaison between the home office and trade organization to conduct market research and establish contacts with prospective customers and partners. It is useful for companies looking to explore the Hong Kong market before making a larger investment.

A representative office may only be engaged in any of the following functions
  • conducting research and providing data and promotional materials to potential clients and partners
  • conducting research and surveying for its parent company in the local market
  • liaison with local and foreign contacts on behalf of its parent company
  • acting as a coordinator for the parent company’s activities
  • making travel arrangements for parent company representatives and potential clients and other non-profit making business activities