Hong Kong Company Incorporation Guide (2) - Features of Hong Kong Company (Private Company Limited by Shares)

Type of Company for International Trade and Investment

Private Company Limited by Shares (Limited Liability Company, Private Company, LLC).

Restrictions on Trading

Cannot undertake banking or insurance activities or financial business (such as currency trading) unless relevant licences are obtained.

Power of Company

A Hong Kong Company has all the powers of a natural person.

Language of Legislation and Corporate Documents

Legislation in both English and Chinese; incorporation documents, such as Memorandum and Articles of Association (also known as Articles of Association, bylaws and constitutions in other countries), Notification of Appointment of First Directors and Secretary etc could be prepared either in English or Chinese.

Name of Company

It is not possible to reserve a name. It is essential to check that there is no similar or identical name on the Register of Companies maintained by the Companies Registry, which would prevent the company being incorporated.

A name that is similar to or identical to an existing company. A name that constitutes a criminal offence or is otherwise contrary to the public interest. A name that implies government patronage.

See also: Hong Kong Company Names Guidelines

The following words could only be used with permission: Building society, Chamber of Commerce, chartered, co-operative, imperial, kaifong, mass transit, municipal, savings, tourist association, trust, trustee, underground railway, bank, insurance, assurance, reinsurance, fund management, asset management and investment fund.

The name of a company must be ended with "Limited" if in English and "YOU XIAN GONG SI" if in Chinese.

Disclosure of Beneficial Ownership to Authorities

Not required. Confidentiality can be obtained by using nominee shareholders.

Share Capital

There are two types of share capital, one is authorised share capital and another is issued and paid up share capital. There is no limitation on the amounts of both types of share capitals. For most of the small private company, the authorised share capital is usually set at HK$10,000 divided into 10,000 shares of HK$1 each and the issued share capital is usually set at HK$1 divided into 1 share of HK$1 each.

Also see: increase of share capital, allotment of shares

A Hong Kong company could issue ordinary shares, preference shares, redeemable shares and shares with or without voting rights. Bearer shares not allowed.

Shareholders

A minimum number of one shareholder is required whose details are filed on the public register maintained by the Companies Registry. Corporate shareholders are permitted and anonymity can be achieved by the use of nominee shareholders. The shareholders can be of any nationality and be resident anywhere in the world and meetings can take place anywhere.

Directors

A minimum of one director is required and full details of these must be filed with the Companies Registry. The director can be of any nationality and be resident anywhere. Corporations incorporated anywhere can act as director. There is no requirement for board meetings to be held within Hong Kong and directors may be resident anywhere in the world.

Also see: Non-statutory Guidelines on the Duties of Directors of Hong Kong Company

Company Secretary

A company must appoint a Company Secretary who can either be a person or a corporation. If the secretary is a person, he or she must be a Hong Kong resident. If the secretary is a corporation, the corporation must has a registered office or a place of business in Hong Kong. We will provide a company secretary at a cost of USD275 per year, if required.

Registered Office

A company must maintain a registered address in Hong Kong where the correspondence from Hong Kong Government can be served. We will provide the registered office at a cost of USD175 per year, if required.

Annual Reporting

Hong Kong companies are required to prepare audited accounts under the company laws. Also, a copy of the audited financial statements is to be furnished with Inland Revenue Department together with Profits Tax Return. The audited financial statements are not available to the public or to the foreign authorities except those of a listed company. We can provide complete supporting services after incorporation, such as book-keeping and auditing (please click here for details of our accounting services) and tax filing (please click here for details of our tax filing services)

All companies must also prepare and file an annual return which gives details of the current directors and of the shareholders who have held shares in the company at any time during the year.

See also: Step by step guide to register a Hong Kong company