Hong Kong Company Formation HSBC website login. Call: 86400 6017 175
Hong Kong Company Formation | Offshore Company Formation
Share |

Comparison of Different Business Vehicles

Home > Learn about Incorporating Company in Hong Kong > Comparison of Different Business Vehicles

Comparison of Different Business Vehicles - Unincorporated vehicles

Learn about Hong Kong company formation

  • Unincorporated vehicles (sole proprietors and partnerships) are usually easier and cheaper to form. They are not required to disclose most of the information for public inspection but the owner will be personally liable for all debts and obligations of the business.
  • They are not a popular form of business in Hong Kong mainly because of the risks involved and the problem of transfer of ownership and raising fund during the course of business.

Comparison of Different Business Vehicles - Incorporated vehicles

  • Incorporated vehicles(limited companies) are relatively more expensive to form and operate, but the liability of owner will be limited and it is easier to expand or transfer ownership.
  • The memorandum and articles are the primary legal document of a company. Memorandum contains the name of the company, authorized capital, initial members and object clause (if any). Articles are a set of internal regulations that governs the day to day operations of the company. Both memorandum and articles have to be filed to Companies Registry at the time of incorporation or if there is any changes thereafter. At least one subscriber (shareholder) is required in the memorandum and each of the subscribers must subscribe to at least one share in the company.
  • Incorporated vehicles is the most popular form of business in Hong Kong. There are also a lot of legal advantages of using a limited company to carry on a business.

Here is a summary and comparison of unincorporated and incorporated business :

  • No.of partners
  • Unincorporated Sole Proprietors / Partnerships : 1 for sole proprietor / 2-20 for partnerships
  • Incorporated Limited Companies : At least 1
  • Registered with Companies Registry
  • Unincorporated Sole Proprietors / Partnerships : Not required
  • Incorporated Limited Companies : Required
  • Accounting record
  • Unincorporated Sole Proprietors / Partnerships : Required
  • Incorporated Limited Companies : Required
  • Audit requirement
  • Unincorporated Sole Proprietors / Partnerships : Not required
  • Incorporated Limited Companies : At least once per year by certified public accountant
  • Disclosure of company information
  • Unincorporated Sole Proprietors / Partnerships : Not required
  • Incorporated Limited Companies :
    Financial statements(not for private companies), company directors, secretary, shareholding structure, charges, etc are required to file with the Companies Registry for public inspection.
  • Startup costs
  • Unincorporated Sole Proprietors / Partnerships : Lower
  • Incorporated Limited Companies : Higher
  • Running costs
  • Unincorporated Sole Proprietors / Partnerships : Lower
  • Incorporated Limited Companies : Higher
  • Separate legal entity
  • Unincorporated Sole Proprietors / Partnerships :
    No - owner personally liable for obligations and debts of business
  • Incorporated Limited Companies : Yes - liability of owners is limited
  • Fund raising methods
  • Unincorporated Sole Proprietors / Partnerships : Usually owner personal injection or personal bank loan
  • Incorporated Limited Companies :
    By issuing new shares, exchanging shares, placing of shares, bank loan, etc
  • Registration procedure
  • Unincorporated Sole Proprietors / Partnerships :
    Apply to business registration office within 1 month from start of business.
  • Incorporated Limited Companies :
    Appoint a professional company secretarial firm or lawyer to incorporate, usually requires one to two weeks to incorporate.

Comparison of Different Business Vehicles Others Infomation

Hong Kong Company Formation,offshore company formation - To ask us a question.