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CONCORD TECHNIC LTD. |
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Practical
Aspects
Related to Company Formation
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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
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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);
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- If the Intended company name is very similar to an existing
company name, it may not be approved by
the Registrar of the Companies;
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- 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);
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- 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;
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- 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;
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- 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;
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- 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.
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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:
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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;
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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;
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The client company is required to prepare its books of
accounts and have them audited annually as
prescribed
by the Companies Ordinance;
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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.
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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;
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- The name must be in either English or
Chinese, or the company can have both an English and Chinese name;
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- 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;
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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);
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- 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;
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- Shareholders will appoint directors for management
and stewardship of their company;
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- 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);
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- Incorporated company, whether incorporated locally or
overseas, can also act as a shareholder;
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- Transfer of shares is restricted to
those only
approved by the board of directors;
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- 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;
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- Sole directorship is allowed (who
can be the
same shareholder, but who cannot be the same secretary);
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- 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);
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- 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;
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- 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;
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- 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.
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7.
Secretary
- All companies must have a local resident
secretary or a local incorporated secretary;
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- The secretary cannot be the same person as the
sole director;
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- 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.
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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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Company address: Room 1208, Kai Tak Commercial Building,
317-319 Des Voeux Road Central, Hong Kong.
Telephone: (852) 2541 0180 Fax: (852) 2851
9705
Email:
infoserv@ctltd.com.hk |
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