Set up Unlimited Company in HK
Setting up an Unlimited Company is a popular choice for entrepreneurs because the application process is simple and the cost of establishing a sole proprietorship/partnership is lower than setting up a Hong Kong Limited Company.
According to the Business Registration Ordinance (Cap. 310) of the Laws of Hong Kong, a Hong Kong sole proprietorship or partnership company is required to submit an application for a Hong Kong unlimited company to the Business Registration Department within one month of commencing operations.
What's The Difference Between a Limited Company and an Unlimited Company?
While novice entrepreneurs may have a business plan, they may lack practical experience in company operations. For example, which type of company should a joint venture with multiple partners establish? The choice between an unlimited company and a limited company should be considered from four main aspects: incorporation laws, registration fees, company tax filing and debt assumption. Furthermore, it is necessary to weigh personal assets and risk tolerance when choosing between a limited or unlimited company.
Five Procedures for Starting Unlimited Company
- Click here and fill in the application form: submission of proprietor or partner documents
- Verification of Information: Our Customer Service officer will contact the client to verify the company name and information and conducts due diligence.
- Payment Methods: Faster Payment System (FPS), bank transfer, check, e-check, or cash.
- Signing: The proprietor or partner must personally visit the General Accounting to verify their identity and sign the documents for setting up the unlimited company.
- Completion: Collect the business registration certificate and unlimited company account opening documents.
Unlimited Company Service Plan
Unlimited Company Economy Package
HK$ 2,950 (takes 7-8 working days)-
Business Registration Fee: HK$ 2,350
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Business registration certificate
Unlimited Company Special Package
HK$ 3,350 (takes 7-8 business days)-
Business Registration Fee: HK$ 2,350
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Business registration certificate
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One Company chop
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Certified copies of documents issued by CPA
Remarks:
- All plans do not include document delivery service, and customers need to arrange courier at their own expense.
- The required time is calculated from the date the client signs all the documents that must be submitted to the government.
Required Documents for Set-Up Unlimited Company
- Company Name: We will provide preliminary advice based on the company's Chinese and English names.
- Company Address: It is recommended to provide a business address to avoid violating regulations regarding the misuse of public housing or land titles.
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Business Nature: e.g. food and beverage services; details:
Selection of Business Registration Nature - Due Diligence Documents: ID card and proof of address for the proprietor or partners
- Opening Date: Unlimited companies must apply for a business registration certificate within one month of commencing operations.
Open Unlimited Corporate Bank Account
After completing the application for an unlimited company, the proprietor or partners can schedule an appointment to open a company account with the bank.
List of documents required for opening unlimited company bank account
- Business registration certificate and certified copy of business registration.
- Identification documents and proof of address for the most recent 3 months for the proprietor, partners, and signatories.
- Business documents, such as company invoices, company business address leases, company service quotations, purchase orders, etc.
First-Year Value-Added Service Discounts for Unlimited Company
Virtual Office
For the first year, the half-price uses the Central area as the company's registered address, providing one-stop mail and parcel collection, telephone and fax services
Set Up Sole Proprietorship/Partnership FQAs
A: No, a company secretary is a statutory position in a Hong Kong limited company. In an unlimited company, the only titles are proprietor or partner.
A: It is cheaper to open a Hong Kong unlimited company than to incorporate a limited company. Moreover, the tax filing procedures for unlimited companies are simpler because there is no need to arrange an audit, and the tax filing fee is relatively cheap.
A: No, an unlimited company can only hold assets as a proprietor or partner.
A: No, an unlimited company can only handle contracts and sales as a proprietor or partner.
A: An unlimited company has no independent legal status and can only act as proprietors or partners. However, but the Hong Kong Company Law defines a limited company as a legal body corporate. A limited company can open a company account, hold assets (such as stocks, vehicles, and buildings), and can sign sales contracts in the name of the limited company.
: No, unlimited company profits, which can be calculated at unlimited company tax rate or personal assessment, under a two-tiered profits tax system: 7.5% for profits of $2,000,000 or less, and 15% for profits of $2,000,000 or more.
Limited company tax rates: 8.25% for profits of $2,000,000 or less, and 16.5% for profits of $2,000,000 or more.
Furthermore, as a legal body corporate, a limited company cannot combine its profits and losses with its shareholders' personal income tax calculations.
A: Unlimited companies do not need to arrange for a CPA to audit them; they can hire a professional accounting firm or handle it by themselves.
Limited Company VS Unlimited Company
| Unlimited Company (Sole Proprietorship/Partnership) | Limited Company | |
|---|---|---|
| Number Of People and Position | It must be
Sole Proprietorship: 1 proprietor Partnership: 2-20 people | Number of directors: 1-50 (minimum 1 individual director); directors may also serve as shareholders. Company secretary: 1 person/company; if the company has only one director, the director may not also serve as the company secretary. |
| Legal Status and Definition Under Hong Kong Company Law | It has no independent legal status and can only hold assets (such as stocks, vehicles, properties, etc.) in the name of the proprietor/partner and can only handle contracts and transactions in its own name. | Hong Kong company law defines a limited company as a legal body corporate. A limited company can open a company account, hold assets (such as stocks, vehicles, properties, etc.), and can handle contracts and transactions in the name of the limited company. |
| Transfer and Succession of Unlimited Company and Limited Company | An unlimited company cannot be passed down through generations. If the boss (proprietor/one of the partners) dies or goes bankrupt due to debts, the unlimited company will cease to exist and cannot be transferred or inherited. | The shares of a limited company are transferable, and the shares of the company are regarded as inheritance; if a shareholder dies, the heirs can continue the operation. |
| Debt Liability | An unlimited company, as the name suggests, the boss (proprietor/partner) has unlimited liability. All debts of the company are equivalent to the boss's (proprietor/partner) personal debts, which must be "taken over" and repaid with personal assets. | When a shareholder sets up a limited company, they must set a share capital (share price and value), and the shareholder's maximum liability for debt is equal to the share capital. If the company's share capital is HK$1, and the limited company is insolvent, the shareholders will only be responsible for the HK$ 1 debt, which will not affect the personal assets of the shareholders. |
| Corporate Tax Rate | Unlimited company profits can be calculated at (1) unlimited corporate tax rate or (2) personal income tax: 1) Unlimited company tax rate - net profit of HK$2,000,000 or below – 7.5%; - net profit of HK$2,000,000 or above – 15% 2) Choose to file a tax return under "personal income tax", the net profit will be transferred to "personal assessment" deductible amount of the proprietor/partner (e.g. charitable donations, mortgage interest, etc.) according to shareholding ratio of the proprietor/partner, and then the tax will be calculated according to the progressive tax rate. | Tax rates applicable to the audit report: - Net profit of HK$2,000,000 or below – 8.25%; - Net profit of HK$2,000,000 or above – 16.5% Limited company is a body corporate and cannot be combined with shareholders' personal assessment tax. |
| Corporate Tax Filing | You can hire a professional accounting firm to handle it or do it by yourself . | A Certified Public Accountant (CPA) audit must be scheduled. |
| Annual Government fees | Business registration fee is HK$2,350, which can be waived upon application. | In addition to the business registration fee of HK$2,350, there is also an annual return filing fee of HK$105 to the Companies Registry. |
| Deregistration Company Procedure | The deregistration procedures can be handled by a licensed company secretary or by the applicant themselves. | The application for company deregistration needs to be approved by the Inland Revenue Department first. After receiving the "No Objection to Deregistration Notice", the Companies Registry will then approve the application. It is recommended that a licensed company secretary handle the process. |
What Is the Difference Between a Sole Proprietorship and a Partnership?
A sole proprietorship is an unlimited company operated by one person. A sole proprietorship has only one owner called the proprietor, and its assets and liabilities of a sole proprietorship company are tied to that owner.
A partnership is an unlimited company operated by two or more partners, with a minimum of 2-20 people to a maximum of 20 people. The assets and liabilities of a partnership are tied to the partners proportionally.
For example, two people jointly run a restaurant with a net worth of $200,000, and each partner accounts for 50%, meaning each person accounts for $100,000 in company assets.
Ongoing Corporate Support Services
Accounting Services
Prepare company profit and loss statements, balance sheets, and general ledgers; clear backlogged accounting records; provide accounting services on an annual, quarterly, or monthly basis.
Tax Services
Professional tax advisors provide formal tax advice, enabling clients to enjoy the best tax benefits.
Start a Company
You can choose your own company name, available for an instant company registration service!
Buy Ready-Made Company
Purchase procedures, card printing, and contract signing can be arranged on the same day, allowing you to start your business faster.
Trademark registration
nd registering a trademark can protect the company's brand and reputation
Ongoing Corporate Support Services
Accounting Services
Prepare company profit and loss accounts, balance sheets, and general ledgers; clear backlogged accounting records; provide accounting services on an annual, quarterly, or monthly basis.
Tax Services
Professional tax advisors provide formal tax advice, enabling clients to enjoy the best tax benefits.
Start a Company
You can choose your own company name, available for an instant company registration service!
Buy Ready-Made Company
Purchase procedures, card printing, and contract signing can be arranged on the same day, allowing you to start your business faster.
Trademark registration
Trademarks represent the uniqueness of a company's goods or services, and registering a trademark can protect the company's brand and reputation
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