Analysis Of The Advantages And Disadvantages Of Limited And Unlimited Registered Hongkong Company

There are many types of Hongkong companies, but most entrepreneurs choose to set up the Hongkong Private Limited Company.

In Hongkong, there are more than 50 private limited companies, but only one thousand or two thousand public companies.

The set up HK company can be registered under the Hongkong Companies Ordinance in the Hongkong registration office.

The following is a brief description of the respective advantages and disadvantages of registered Limited Hong Kong Company and registered Unlimited Hong Kong Company.

What is Limited Hong Kong Company? Limited Hong Kong Company (limited company) refers to a registered company incorporated with the Company Ordinance of Hongkong, a company with limited company liability, which is a limited liability company with limited liability to the company's debts.

What is Unlimited Hong Kong Company? Unlimited Hong Kong Company (unlimited company), which is incorporated under the Companies Ordinance of Hongkong, and its shareholders have unlimited corporate liability for corporate debts.

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In Hongkong, a sole proprietorship or partnership registered under the Business Registration Ordinance is also known as an unlimited company, but the difference between a sole proprietorship and a partnership is that the first two do not have a legal person qualification.

The Hong Kong limited company has registered the following advantages in the registration office of the Hongkong company:

1, the responsibility is limited - the responsibility of shareholders to the company is limited to the amount of shares held.

The financial burden is limited to the amount of investment to buy a company's share.

Once a company fails to pay its debts, the Company Secretary may make liquidation by the shareholders, creditors or the court, and sell all the assets of the company to liquidate the company's debts. Even if the assets are not enough to repay debts, the amount that creditors can only recover is limited to the sale of assets. The company shares no obligation to collect debts and repay debts.

2, shareholder changes do not affect the existence of the company.

The organization of a company is divided into two levels: ownership and management.

Shareholders need money or do not want to invest in a company. They can sell their shares and pfer them to others.

This will not affect the operation of the company.

However, in fact, there are some small private limited companies.

Often a director of a company, so changing hands will also affect the management of the company.

3, financing - a company can use floating charge to obtain financing, that is, a company can borrow money from a bank, with all assets, including plant, machinery, means of production, stock to be sold, and accounts as collateral.

Even so, the company can still buy, replace and otherwise process these assets in its daily business without the approval of the bank.

4. Ownership. In law, the company is an independent person who can own property and contract with people in its own name, even if shareholders are changed.

Companies can also sue people.

5, management another feature of a company is ownership and management.

A shareholder is a person who owns a company. The director of a registered Hongkong company and a company secretary are the people who manage the company.

Shareholders are limited in their responsibilities. They can appoint managerial professionals and business professionals to manage and manage their businesses.

Shareholders are only responsible for capital contributions to form company capital.

They invest in companies, and if companies make money, they can get dividends.

On the other hand, the registered Limited Hong Kong Company also has the following shortcomings:

1, data disclosure: the law requires companies to report certain data to the Registrar of companies and disclose them to the public.

For example, companies should store the following data for public access: capital structure, personal data of shareholders, directors and secretaries, mortgage pfer shares and so on.

Public companies should also disclose publicly their annual accounts.

2, Limited Hong Kong Company is accepted by Hongkong.

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Compared with partnership, the procedure of establishing a company is more complicated.

In addition, after the establishment of the company, directors and secretaries continue to have the responsibility to report the specified statements to the Registrar of companies.

The company also has to prepare the audited accounts.

3, complex procedures: companies must keep certain registers, such as register of members, directors and secretarial registers, charge registers and so on.

There are also various kinds of meetings in the operation of the company, such as annual general meeting, special shareholders' meeting and board meeting.

Companies must keep records of these meetings.

There are many resolutions.

Investors who want to set up companies must master this.

4, the company's cancellation of liquidation is complex and expensive: usually, a company can only liquidate its business.

When winding up, the liquidator must be entrusted to sell the assets of the company and distribute the proceeds to creditors and shareholders.

If a company's assets are enough to offset its liabilities, it can be automatically concluded by the members of the company.

If assets are not enough to offset debt, it is normal for creditors to voluntarily liquidate or force liquidation and trademark registration.

The liquidation procedure itself is complex and expensive, and often requires lawyers or accounting firms to handle it.

The cost of winding up an ordinary company may exceed 10 thousand yuan.

5, higher tax: Limited Hong Kong Company profits tax rate is 17.5%, slightly higher than sole proprietorship and partnership.

However, many of the company's expenses can be deducted from tax, such as directors' remuneration. Therefore, although the company's tax rate is relatively high, the establishment of a private limited company is not necessarily without merit.

Unlimited Hong Kong Company can be divided into Unlimited Hong Kong Company without shares and Unlimited Hong Kong Company with shares.

The division of shares does not affect shareholders' responsibility for the company.

The role of stock division is to divide the responsibilities and control rights among shareholders, and shareholders can also pfer shares.

However, because of the provisions of article 170th (1) of the Companies Ordinance of Hongkong, the shareholders of Unlimited Hong Kong Company may even be liable to pay debts of the company because of the provisions of the article even if they have left the company.

In this way, the pfer of shares does not make shareholders really divorced from the company, which is quite different from the pfer of Limited by Share Ltd shares.

Members of the Unlimited Hong Kong Company generally do not have the highest number of people, except Private Companies's unlimited company.

Despite the unlimited liability of shareholders of unlimited companies, it does not mean that the company's personality and shareholders' personality are different.

Unlimited company and its members are still relatively independent and separate legal subjects.

Therefore, the liabilities of the unlimited company and its members are separated from each other. The creditors of the unlimited company can not sue for individual shareholders. The unlimited company will be required to pay the company's share to the company according to the circumstances.