What is a limited liability company (LLC)?
A limited liability company (LLC) is a business organization with a liability shield advantage to the partners and shareholders. Several states permit the formation of a LLC. This business organization arose from the traditional partnership, where past business owners desired to adopt and operate a business structure.
The main aim of forming a LLC is to distribute their income to the partners, as well as permit the shareholders and directors of the company. This to protect business owners from personal liabilities if the business makes a loss. If the business operates in a loss, the business owners establish a separate independent corporation that assumes the entire liability of the incurred loss or debts of the company.
The requirement of setting up a company in Hong Kong
Nonetheless, there are specific basic requirements and facts that one must have before setting up their company in Hong Kong. Some of the requirements that you must be familiar with include the following:
- Company name: A company must have a name. Thus, you should choose a unique name for your company that will help it stand out among the rest before proceeding with the incorporation of a Hong Kong Company.
- Companies Ordinance: It is required that all the companies in Hong Kong, except for those that are listed by the Hong Kong Stock Exchange, create and maintain the details of all the individuals who have significant control of the company.
- Directors: All companies that are being set up in Hong Kong should have at least one director. However, an unlimited number of directors is equally allowed for a LLC company. The directors must be a natural person, and they can be of any nationality but a Hong Kong resident. The director must attain the majority age (18 years) and must not be bankrupt or convicted of any malpractices before. It is not a must that the director also is a shareholder. Besides the individual directors, a company can equally have nominee corporate directors. The directors’ board meetings can be held in any part of the world.
- The Shareholders: A private limited company in Hong Kong can have a minimum of one shareholder with a maximum of 50 shareholders. The shareholders of a company should be at least 18 years of age and can be of any nationality. The shareholders can either be 100% local or foreign shareholding, and they can either be an individual or a company.
- The Company Secretary: Before incorporating a LLC company in Hong Kong, it is mandatory to appoint a company secretary. It is required that a company secretary resides in Hong Kong if they are an individual. However, if it’s a corporation individual, they are expected to have their physical office in Hong Kong.
The secretary of a company is responsible for maintaining the statutory books and all the company records. Further, they should ensure that the company complies with all the regulatory requirements.
Necessary documents for the registration process of an LLC
The process of registration of a Limited Liability Company requires the following documents:
- A copy of the Articles of Association for the company.
- A dully filled incorporation that is supposed to include the following information: Name of the company, registered address, Brief description of the business activities, the liability of members, the number of shareholders, share capital registered.
- A copy of the passport in the case of non-resident shareholders and directors.
- Business Registration Application Forms, available from Inland Revenue Department.
It is essential to hire a professional firm to do the LLC incorporation in Hong Kong to prevent any issues faced if doing it yourself. They can assist in preparing necessary incorporation and identification documents on your behalf. You will get assistance such as the opening of a bank account, having a common seal and stamp, applying for a business license, including filing annual returns for your company.
Should you be interested in starting your business in Hong Kong, deciding the right business entity can be difficult, and the options available may be confusing. Paul Hype Page is here to help. With over 10 years of experience in the region, we have helped many businesses find the right way to launch a successful business.