Open a Limited Liability Company in Hong Kong
Open a Limited Liability Company in Hong KongUpdated on Saturday 14th July 2018
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Depending on the nature of their business activities, foreign investors can choose from a wide range of legal entity types to establish in Hong Kong (partnerships, sole-proprietorships etc), but the most commonly incorporated one is the limited liability company (LLC). In order to complete the registration process as soon as possible, seeking assistance from a lawyer in Hong Kong would be the recommended thing to do.
The limited company is the preferred business form because of the ease of incorporation and the fact that investors are only liable up to the amount of capital they have invested in the company. The list below describes the four main characteristics of the LLC, which are also the main advantages for opening this type of company in Hong Kong:
- • Legal personality: the LLC has a separate identity from its founders, an important difference from the sole trader or partnership;
- • Limited liability: as the name suggests, the shareholders or company members have the advantage of only being partially liable for the debts of the company;
- • Good business image: this type of company is widely used in Hong Kong and, in its equivalents, around the world; this allows for a good business image as LLC are perceived as more reliable legal structures compared to the sole trader, for example; they also have good options for succession and ease of raising capital particularly because of the favorable business perception.
A difference is made between public and private limited companies: the public ones can have more than 50 shareholders and can be listed on the stock exchange – an option for medium or large companies in general.
We invite you to watch a comprehensive video about the main characteristics of the limited liability company in Hong Kong:
Allowed operations of a LLC in Hong Kong
Under the Hong Kong law, a limited liability company has a separate legal identity, different from that of its directors and shareholders. This status entitles the LLC to engage in the following types of operations:
- - sue and be sued;
- - get involved into contracts and doing so in its own name;
- - own its own assets and property (shareholders for example cannot claim its property);
- - develop a form of security for the company's creditors;
- - be independent of its members.
Our law firm in Hong Kong can explain to you all the implications and procedures of opening a LLC in Hong Kong.
Directors and shareholders of a LLC in Hong Kong
A private LLC in Hong Kong has to appoint a minimum of one director (corporate body or an individual, nationality being irrelevant). The public LLCs however, must have a minimum of two directors.
The directors must perform a managerial role in the company and their involvement in the business operations vary according to the company's size. Their duties are generally comprised of duties of care and skill and fiduciary ones.
The company must also have at least one shareholder (corporate body or a person). They have the right to vote, to receive input about the legal structure etc. The minimum share capital for a LLC is HKD 1. You can receive further details from our Hong Kong law firm about opening a company on its territory.
The registration process of a LLC in Hong Kong
In order to register a private limited liability company in Hong Kong, the foreign entrepreneur has to follow some steps and submit some documents, such as:
- • the Articles of Association;
- • a document to the Business Registration office;
- • detailed information about shareholders and share capital;
- • an incorporation form.
A suitable name has to be chosen for the company that will need to be checked for its uniqueness and then submit the applications to the Companies Registry in Hong Kong. The entrepreneur must also open a bank account for the company. Registering with the Inland Revenue Department is sometimes needed as well, depending on the type of business.
Do not hesitate to contact our lawyers in Hong Kong for more information about how to open a company in this location.