These Are the Types of Companies in Hong Kong You Can Incorporate
Incorporation of a company in Hong Kong first requires you to know the type of business entity you should open. Depending on the investment type and owner profile, there are various types of companies in Hong Kong. Take a look at them and see what might fit for you.
Sole Proprietorship
A sole proprietorship is a company under a single individual. It means a single person has every right to the company, but at the same time, is liable for any expenses that might incur. A sole proprietorship doesn’t let the company stand as a separate legal entity, so the owner’s personal funds are not distinguished from the corporate’s account. Every debt is to be paid by the owner so, there’s a high-risk factor in this type of business entity. Due to this reason, this type of company in Hong Kong isn’t really practical by those looking to build an entrepreneur career, and the investors might not be interested in investing in a sole proprietorship. However, if you are only trying out or as running a small business without so much thought of the future, a sole proprietorship is the way to go.
Partnership
The partnership is another among the types of companies in Hong Kong. As its name suggests, a partnership company is an entity under multiple people and all they have rights to the business. The reasons, however, depends on the type of partnership, and there two kinds of partnership companies in Hong Kong.
General Partnership
A general partnership means that every partner has equal rights and has a fair amount of investment and liability. Everyone can make the decision a decision and the decision made by an individual partner effects everyone else running the business.
Limited Partnership
In a limited partnership, some partners don’t have equal rights as everyone else. They make limited investments and what they get their profit share depending on their contribution. Other partners, however, are parts of a limited partnership having all the rights similar to the general business.
Limited Liability Partnership
Professionals usually use a limited liability partnership. It is a type of company where people of different expertise come together, and everyone does particular responsibilities. A partner can only make decisions according to their skills. However, other partners can influence decisions, so great teamwork is necessary if the limited liability partnership is to succeed.
Among the types of companies in Hong Kong, a partnership could be a good idea only if everyone knows what they are doing. Multiple people run the corporate, but still, it isn’t a separate business entity. In a sense we can say that sole proprietorship and partnership are similar, the only difference is the number of people running the company.
Limited Company
A Hong Kong limited company stands a separate legal entity. In this type of company, the owners are responsible for profit, loss or debts depending on how much investment they make. There are two types of limited companies in Hong Kong, a private limited company and a public limited company.
Private Limited Company
First comes the private limited company. A private limited company in Hong Kong can be registered by anyone wishing to start a business in Hong Kong. Depending on the type of investment there are two types of a Hong Kong private limited company.
Company Limited by Shares
The shares of the company are open to other parties which might be individual or corporation, and they are not liable if the company goes down. Everyone takes care of his/her own shares, and the shares can later be sold. The shares usually are not available to the public.
Company Limited by Guarantee
In a company limited by guarantee, each investor is liable for their own investments. There are no stocks, and what an investor is going to get in return is totally complaint on what guarantee has been made on the agreement. Hence the name, company limited by guarantee.
Public Limited Company
A public limited company is very different from a private limited company. In the simplest term, it is a company where shares are available to the public. However, this is not a complete definition of a public limited company, and the concept is very complex. A public limited company is a very big company; let us say, and to be straightforward, it is outside the scope of this article.
Unlimited Company
The difference between a limited company and an unlimited company is that there is no limit to how much investment one can make in an unlimited company. It is the responsibility of the investors to put money on the company at any time, and the only way to keep it from going down is the investment from the owners once it goes down.
Foreign Company
Here’s the last one among the types of companies in Hong Kong. Foreign companies in Hong Kong usually denote the subsidiary of an international corporate located in Hong Kong. A foreign company is the one which already has a headquarter in some other country is only open in Hong Kong to do business in the state.
Still confused about the types of companies in Hong Kong? Contact us, we will help you. Also, want help incorporating a company in Hong Kong? Well, either way, we are always here for you.
