Updated: May 24, 2022
Instead of waiting for the market to improve, it is better to find a way out in the epidemic. For Hong Kong people in 2021, creating a career with a good ability is a rational choice. However, in addition to the right time and place to start a business and cooperation, it is best to first understand the type of company, company procedures, costs, etc., and even the preparation of the company's bank account, office, registered address and other requirements.
Limited Company versus Unlimited Company
There's a saying that"Limited companies have to pay a lot of taxes, and unlimited companies is much better." In order to avoid suspicion, it is best to understand the legal status, debt obligations and annual tax arrangements of different types of companies, and then find a suitable one. Entrepreneurial program.
Let’s talk about the legal status first. A limited company can own assets and sign contracts. It is a legal person organization and has an independent legal status; an unlimited company can only jointly own assets and sign contracts in the name of the proprietor or partner, and has no legal status. Based on the above characteristics, a limited company will be more convenient and decent.
As for debt liability, the shareholders of a limited company are limited to the amount of their capital contributions to the company’s debts. Once the company is insolvent, the company only needs to be liquidated and no shareholder’s personal property will be involved. On the other hand, an unlimited company shall bear unlimited liability for the company’s debts. If the capital is not low at the end of the business, the shareholders must use their private property to repay the company's debts. Therefore, if the market conditions are not good, the impact of unlimited company liabilities on shareholders must be considered.
Restrictions on Hong Kong company name registration
The first thing before submiiting the application is to decide the company's name. Generally speaking, the company name cannot be the same as other corporate bodies. In addition, if the Companies Registry considers the company name to be offensive or a naming that violates the public interest for other reasons, the registration will also be refused.
Before setting up a local company, you can refer to the "Guidelines for the Registration of Hong Kong Company Names" of the Companies Registry to learn more.
"My company name does not violate the regulations of the Companies Registry, is that okay?"
Not over yet. Use the online search center of the company registry, once the company name you want to use has not yet been registered for use by others. Use the online search center to query the company name index.
Procedures after confirming the company name
After the naming is completed, the application process officially begins. Next, prepare 3 forms, including:
NNC1, the "Incorporation Form"
IRBR1, the "Notice to the Business Registration Office"
"Articles of Association"
Since the Companies Registry currently accepts computer input files and does not accept handwritten forms, you can download the relevant forms from the Companies Registry website first and then fill in and submit them with a computer.
First of all, there are two types of "Incorporation Forms", the most commonly used is the NNC1 form, which is designed for the incorporation of a company limited by shares. There is also a NNC1G form for companies other than stock limited companies. The names of the two are very similar. Please make sure to download the applicable format. Enter general company information according to the instructions of NNC1, including the selection of company secretary and director, and the share capital when deciding on the company's composition.
The second is the IRBR1 "Notice to the Business Registration Office". This form is used to apply to the Business Registration Office for the payment of a business registration certificate (commonly known as "BR"). The fee for the one-year certificate is HKD250, and the fee for three years is HKD250. HKD3950.
The last is the "Articles of Association", which mainly fills in the company's total shares, composition and number of shares.
After completing the above three forms, prepare the HKD1,720 company registration fee, together with the business registration certificate fee mentioned in the second item, that is, choose to pay the one-year certificate or the three-year certificate fee.
If you want to speed up the process of setting up a new company, you can also entrust professional company consulting services to reduce the chance of error and make the application process smoother.
Mega Solutions has many years of experiences in companies formation, whether it is Hong Kong limited company, unlimited company, offshore company, and other businesses. If you still have not decided which company to choose to better meet you, you may wish to use the free consultation provided by our professional accountant team.