Formation

The owner of a sole proprietorship takes all the profits and bears all the risks. His/her liability is unlimited for the debts of the business. In a partnership, there are at least two persons enter into an agreement and operate their business as a partnership. The partners are jointly and severally liable for the debts. Both of the two business organizations require to apply for the business registration certificate issued by the Business Registration Office.

A limited company is a separate legal entity and should be registered under the Companies Ordinance. The liabilities of shareholders are limited to the registered share capital. According to the Companies Ordinance, a limited company is required to prepare audited accounts.

2. What is the minimum capital of a limited company?

There is no statutory minimum capital requirement in Hong Kong. In practice, the authorized capital would be HK$10,000 and the issued share capital could be as low as HK$2. Right now the capital duty paid to the Government is HK$1 per HK$1,000.

3. What is the qualification of director and shareholder?

The directors and shareholders of a limited company need not be Hong Kong residents. Only persons who have attained the age of 18 can be appointed as directors. A body corporate (other than a listed company) can act as a director of a company.

4. Is a Hong Kong registered office required for a limited company?

Yes. Every company incorporated must notify the Registrar of Companies of the situation of its Hong Kong registered office and any change within 14 days after the date of incorporation of the company or of the change.

5. Is a company secretary required for a limited company?

Yes. Every company incorporated in Hong Kong must have a Secretary. The secretary must be a Hong Kong resident or a body corporate having its registered office in Hong Kong. However, a sole director of a limited company shall not also be the secretary of the company.

6. How long will it take to incorporate a limited company?

It takes about 7 to 8 days to found a new limited company. For a shelf company (ready-made company), it takes about 1 to 2 days.

7. If I appoint you to found a limited company, what will I get after the incorporation?

After the incorporation, you will get:

1. one set company kit including

- 20 copies of share certificate

- 20 books of Memorandum & Articles of Association

- 1 common seal

- 2 rubber stamps

- 1 statutory book (including register of directors & members)

2. Minutes of first directors meeting

3. Certificate of incorporation issued by the Companies Registry

4. Business registration certificate issued by the Inland Revenue Department

5. Statutory forms filing to the Companies Registry

8. What if I need the service of nominee shareholder?

When we are appointed as a nominee shareholder, we (the nominee) will prepare a declaration of trust whereby we declares that we hold the shares in trust for you (the beneficial owner). The declaration of trust is duly signed by us and stamped by the Stamp Duty Office. In addition, we will prepare a blank instrument of transfer and we sign as a transferor on the instrument of transfer.

A nominee shareholder agreement is also prepared and signed to describe the right and obligation of the 2 parties.

If you want to transfer back the shares to your name, you should sign as transferee on the blank instrument of transfer and submit the instrument of transfer and the stamped declaration of trust to the Stamp Duty Office for adjudication.

Our service include the preparation of nominee shareholder agreement, declaration of trust and the stamp duty involved for these documents.

We also provide nominee directors service for our customers. Please contact us at (852)27399698.

9. What is the minimum number of director and shareholder?

According to the Companies (Amendment) Ordinance 2003 which became operative on 13 February 2004, it permits the formation of a limited company by one or more shareholders. It also permits a limited company to have at least one director.

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K. Y. Chan & Co. is a registered firm of the Hong Kong Institute of Certified Public Accountants

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K. Y. CHAN & CO.

Room 602, 6/F., Taurus Building

21A/B Granville Road

Tsimshatsui

Hong Kong

Tel: (852)27399698

Tel: (852)27399313

Email: vc@vcpa.com.hk