Types of Companies in Hong Kong

There are two types of company in Hong Kong: – the Limited Company, comparable to a joint-stock company – the Partnership and Limited Partnership, comparable to a general commercial partnership

Limited

No minimum share capital is prescribed for a Limited company. The share capital is subject to a fee of 0.6% of its amount. Share capital is typically around HKD 1,000.

This type of company cannot operate as a bank, insurer or investment fund without the appropriate licence. Nor may a Hong Kong company sell shares to the public or accept deposits from the public without authorisation. Each year, the accounts must be audited by a Hong Kong auditor who is a member of the professional accountancy body. The audited financial statements are then sent to the Companies Registry together with the annual return (and this information about the company becomes publicly available).

General Partnership and Limited Partnership

General partnerships and limited partnerships differ mainly in the extent of the partners’ liability and in their ability to take part in management.

In a general partnership, all partners are liable for the firm’s obligations with all their assets, and all have an equal right to participate in management and decision-making.

A limited partnership must have at least one general partner with unlimited liability and at least one limited partner, whose liability is restricted to the amount of their contribution and who may not take part in managing the partnership. Partnerships usually have a partnership agreement in place.

With the exception of certain professional partnerships, the number of partners is capped at 20.

An essential step in establishing either type of partnership is obtaining a certificate of registration from the Companies Registry. A limited partnership must be registered, otherwise it will be treated as a general partnership.