5 types of companies
A Hong Kong Private Limited Company – or ‘private company limited by shares’ – is the most commonly used company type for small to medium-sized businesses or trading companies in Hong Kong. A Hong Kong private limited company is a separate legal entity and therefore protects the personal assets of shareholders from business liabilities.
A private limited company that is incorporated in Hong Kong is able to take advantage of all the tax benefits and concessions available to any fully incorporated business in Hong Kong, including the Closer Economic Partnership Arrangement (CEPA), a free trade agreement with Mainland China.
A Hong Kong Private Limited Company must, by its constitution, restrict the right to transfer its shares, limit the number of shareholders to 50 (not including employees and former employees) and prohibits any invitation to the public to subscribe for any shares or debentures. Shareholders can be individuals or corporations of any nationality, domicile or residence.
A Private Limited Company is required to have at least one natural person as director. There is no legal maximum for the number of directors, which can be individuals or corporations of any nationality, domicile and residence. A sole shareholder can be a director of the company.
The registered office of the company must be situated in Hong Kong but it is required to have a company secretary. If the company has one director only, the sole director cannot also be the company secretary. If the company secretary is a natural person, he/she should ordinarily reside in Hong Kong. If the company secretary is a body corporate, its registered office or place of business should be in Hong Kong.
There are no restrictions as to the place at which board meetings can be held. Generally the Articles of Association provide for written resolutions by the directors, as well as for meetings to be held by telephone or through video conference facilities.