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	Home Practical Aspects Related to Company Formation Secretarial and Other Services Other Information and Fees Contact Us Terms		Practical Aspects Related to Company Formation in Hong Kong (Private Limited Companies (Limited by Shares)) List herein the followings are some practical guidelines and tips relating to company formation in Hong Kong: A. Process of Company Formation B. Annual Maintenance C. Definition of Terms and Statutory Requirements 　 A.  Process of Company Formation The formation of Hong Kong private limited company is rather simple and easy and the process can be illustrated   as follows:   Client chooses the type of company (tailor-made or ready-made) -->   Client provides information to us and encloses copies of identity   documents and /or personal references (for overseas client)  -->    We prepare all necessary statutory documents for client's signatures  -->     Submission of signed documents to relevant authorities -->   The formation process is completed if everything approved -->   We then deliver the company kit to client including incorporation certificate, common    seal and business registration certificate etc. and receive balance of the service fee. 1.   Types of companies   a.  Tailor-made company (newly-named):  The first thing is to perform a name search to ensure the intended Company name is not identical to any existing name in the Companies Registry (usually this is performed by the appointed secretarial firm); 　 If the Intended company name is very similar to an existing company name, it may not be approved by the Registrar of the Companies; 　 Formation time:  around 5 working days from date of signature of documents incl. the drafted M&A (client will fill up an information form provided by us beforehand for the preparation of the above documents); 　 Completed formation includes: Memorandum & Articles of Association (M&As), shares certificates, a registered book, signature stamp, a pre-inked stamp, common seal and a certificate of incorporation; 　 Client is required to pay in advance the Business registration fee to the HK Government for the issue of the company's Business Registration Certificate.   b.  Ready-made company (shelf company): Client chooses a company from the company list we provide which details the names and incorporation dates of the companies; 　 Formation time:  only 2 working days for documents preparation and shares transfer (client will fill up an information form provided by us beforehand for the preparation of the above documents); 　 If necessary, a company name can be changed and it takes around 20 days for issue of new certificate; 　 The ready-made company includes: Memorandum & Articles of Association (M&As), shares certificates, a registered book, signature stamp, a pre-inked stamp, common seal, a certificate of incorporation and a letter confirming the company has not carried out any activities and has incurred no liabilities and obligations; 　 Client is required to pay in advance the Business registration fee to the HK Government for the issue of the company's Business Registration Certificate. 2.   Opening of bank account  Required documents: -  Directors' minutes (indicate the way of authorised signatures  e.g. singly or jointly); and -  Certified true copies by local CPA or solicitors on documents relating to the incorporation of the company. 　 For overseas client who do not hold a local Identity Card, some banks require additional documents e.g. Directors' Declaration and a Certificate Letter from a local CPA or solicitors' firm on the Directors' Declaration.  　 B.  Annual Maintenance Company is subject to annual maintenance mainly in the tasks of submission of forms, payment of renewal fees and preparation of accounts under the Hong Kong Companies Ordinance and the Inland Revenue Ordinance as follows: 　 Client is required to submit an Annual Return to the Companies Registry within 42 days of the anniversary date of incorporation of the company, otherwise, higher filing fees will be incurred; 　 Business registration fee has to be paid to the Government at around the date of incorporation of the company, whether the company has business activities or not during the year; 　 The client company is required to prepare its books of accounts and have them audited annually as prescribed by the Companies Ordinance; 　 The client company is required to report employees' salaries (incl. directors' salaries) if salary of each employee is, in general, over his personal allowance entitled during the year of assessment.  　 C.  Definition of Terms and Statutory Requirements The followings are listed for clarifying some terms and providing information on the rights and obligations of some common title holders under the Companies Ordinance: 1.  Company Name The name of a Hong Kong limited company is unique; 　 The name must be in either English or Chinese, or the company can have both an English and Chinese name; 　 When approved by the Company Registrar, the company name with its unique company number and date of  incorporation will be shown on its certificate of incorporation; If necessary, the company can change its company name and it would take around 20 days for process. 2.  Business activities There is usually no limitation on the number of kinds of principal activities the company can conduct (which can be prescribed in the Memorandum of Association of the company)  e.g. it can conduct both trading and service kinds of businesses during a year; 　 There is also no limitation on whether the business is carried out in Hong Kong or overseas. (Note:  When all business activities during a year are conducted outside Hong Kong, the company can claim full exemption from the Hong Kong profits tax for the year.) 3.  Registered office address and business address All companies must have a local registered office address (post office box is not allowed); 　 The company's business address can be different from or same as its registered office address.  The company can conduct business at location outside Hong Kong. (Note: The address as shown in the Business Registration Certificate must be a local address.) 4.  Share capital      Issued capital Amount issued and allotted to shareholders. 5.  Shareholders Shareholders are called subscribers when they start the formation of the company and shareholders are the owners of the company; 　 Shareholders will appoint directors for management and stewardship of their company; 　 Generally, there is no restriction on the nationality and place of residence of the shareholders (overseas clients are usually required to submit their passport copies and professional/ personal references during the formation process); 　 One shareholder can form the company (who can be the same director); 　 Incorporated company, whether incorporated locally or overseas, can also act as a shareholder; 　 Transfer of shares is restricted  to those only approved by the board of directors; 　 The percentage of shares held is more important than the number of shares held and a 75 percent of shares holding usually has dominant control over the operation of the company e.g. appointment/removal of director, determine amount of directors' salaries and dividends etc. 　 Liability of shareholder is limited to the amount of issued share capital he/she holds. 6.  Directors Directors are appointed by shareholders for the management of the company; 　 Sole directorship is allowed (who can be the same shareholder, but who cannot be the same secretary); 　 Generally, there is no restriction on the nationality and place of residence of the directors (overseas client usually requires submission of passport copy and professional/ personal reference during the formation process); 　 Incorporated company can also act as the director, whether incorporated locally or overseas, but HK company must has at least one director who is a natural person; 　 Directors' rights and duties are prescribed by the Companies Ordinance and in the Articles of Association of the company, which also contain rules for governing the internal affairs of the company; 　 Directors can receive directors' fees for holding of their offices during the year or they can receive additional directors' salaries if they provide services to the company during the year. 　 7.  Secretary All companies must have a local resident secretary or a local incorporated secretary; 　 The secretary cannot be the same person as the sole director; 　 Secretary is responsible for arranging meetings, preparing minutes, returns and maintaining the company's statutory register etc. according to the Companies Ordinance; however, in practice, the works are usually performed by secretarial firm on his/her behalf. 　 For further information or enquiry, please feel free to contact us. [Note:  The above are for general guidelines only.  Users should refer to the relevant Ordinances  (e.g. the Hong Kong Companies Ordinance, Inland Revenue Ordinance) for detailed knowledge, legislation and compliance.]
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