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Company Limited by Guarantee

Updated: Jul 25

A company limited by guarantee (CLG) is a type of company that is not incorporated with a share capital. Instead, the liability of the members is limited to the amount they have guaranteed to contribute to the company in the event of its winding up. CLGs are typically used by non-profit organizations and charities, as they offer a number of advantages over other types of companies, such as:


  • Limited liability: The members of a CLG are only liable for the company's debts up to the amount they have guaranteed to contribute. This means that they are not personally liable for the company's debts, even if the company goes bankrupt.

  • No share capital: CLGs do not have a share capital, which means that they are not required to issue shares or raise capital from investors. This can make them a more attractive option for non-profit organizations, as they do not have to worry about repaying investors if the company fails.

  • Simple structure: CLGs have a simpler structure than other types of companies, which can make them easier to manage. There are no shareholders to worry about, and the board of directors is typically smaller than the board of directors of a company limited by shares.


If you are considering incorporating a non-profit organization or charity in Hong Kong, a CLG may be the right option for you. CLGs offer a number of advantages over other types of companies, and they can be a more cost-effective and efficient way to run your organization.


Company limited by guarantee does not have share capital and the liability of members is limited by the company's article of association to the amount undertaken to contribute by the members to the company's assets when the company winds up. Non-profit organizations are usually registered as guarantee companies.


Why Company Limited by Guarantee


If you are considering incorporating a non-profit organization or charity in Hong Kong, a CLG may be the right option for you. CLGs offer a number of advantages over other types of companies, and they can be a more cost-effective and efficient way to run your organization.


Here are some additional benefits of incorporating a CLG in Hong Kong:


  • Flexibility: CLGs are very flexible, and you can tailor the structure of your company to meet your specific needs.

  • Transparency: CLGs are required to file annual returns with the Companies Registry, which makes them more transparent than other types of companies.

  • Accountability: The members of a CLG are accountable to each other and to the public. This can help to ensure that your organization is well-managed and that its funds are used in a responsible way.


Here are some specific examples of organizations that might benefit from incorporating as a CLG in Hong Kong:


  • Charities: CLGs are a popular choice for charities because they offer limited liability and tax benefits.

  • Non-profit organizations: CLGs can also be a good option for non-profit organizations, such as social welfare organizations, educational institutions, and professional associations.

  • Clubs and societies: CLGs can also be used to incorporate clubs and societies.


Why Hong Kong

There are a number of reasons why you might choose to incorporate a company limited by guarantee (CLG) in Hong Kong. Here are some of the most common reasons:


  • Tax benefits: CLGs may be eligible for certain tax benefits in Hong Kong. For example, they may be exempt from paying profits tax.

  • Good reputation: Hong Kong is a well-respected international financial center, and incorporating a CLG in Hong Kong can give your organization a good reputation.




Company Limited by Guarantee | Bestar
Company Limited by Guarantee | Bestar

Setting up a Company Limited by Guarantee


Here are some of the requirements for incorporating a CLG in Hong Kong:


  • The company must have at least two members.

  • The company must have a name that ends with the words "Limited by Guarantee" or the abbreviation "Ltd. by Guarantee".

  • The company must have a registered office in Hong Kong.

  • The company must file an annual return with the Companies Registry.


Here are the steps on how to set up a company limited by guarantee in Hong Kong:


  1. Choose a name. The company name must end with the words "Limited by Guarantee" or the abbreviation "Ltd. by Guarantee". The name must also be unique and not already in use by another company.

  2. File a name search. You can file a name search with the Companies Registry to check if the name you have chosen is available.

  3. Prepare the incorporation documents. The incorporation documents include the memorandum of association and the articles of association. The memorandum of association sets out the company's objectives and the articles of association set out the company's internal rules and regulations.

  4. Appoint directors and secretary. The company must have at least two directors and a company secretary. The directors and secretary must be natural persons who are resident in Hong Kong.

  5. File the incorporation documents with the Companies Registry. The incorporation documents must be filed with the Companies Registry along with a registration fee.

  6. Obtain a business registration certificate. Once the company is incorporated, you will need to obtain a business registration certificate from the Inland Revenue Department.


1. Choose the name of company


Select the company name.


Company names that are the same as those appearing in the index of company names maintained by the Registrar of Companies ("the Registrar") will be rejected. The company name search can be done for free through the Cyber Search Centre or the Company Search Mobile Service. Use the "Exact Name Search" mode and enter the complete and accurate company name you intend to register (using traditional Chinese characters as the Chinese name).


Do not use company names that may infringe the intellectual property rights ("IPR") of third parties. In Hong Kong or elsewhere, infringement of the intellectual property rights of others may be subject to criminal or civil sanctions. You should also search in the Trademark Register maintained by the Intellectual Property Department (http://ipsearch.ipd.gov.hk).


2. Situation of registered office of company


The registered office must be situated in Hong Kong.


3. Requirements of directors


A company limited by guarantee must have at least two directors, one of whom may be the company secretary. It must not have a body corporate as its director. A non-Hong Kong resident can be appointed as a director of a company.


4. Requirements of company secretary


A company limited by guarantee must have a company secretary. If the company secretary is a natural person, he or she must ordinarily reside in Hong Kong. If the company secretary is a body corporate, the address of its registered or principal office or place of business should be in Hong Kong.


Company secretaries who are natural persons are only required to report their correspondence addresses to the Registrar of Companies instead of their usual residential addresses.


Step 1 – Deliver application


Provide the following documents electronically through the "e-Registry" or "CR eFiling" mobile app:


a. Incorporation Form – Form NNC1 (for company limited by shares) or Form NNC1G (for company not limited by shares);


b. A copy of the articles of association; and


c. Notice to Business Registration Office (IRBR1).


The registrability of a company name can only be confirmed after the Company Registry has processed the registration application. If the proposed company name is incorrect or cannot be registered, the application may be rejected and the lodgment fee paid will not be refunded.


If the founder member who signed the incorporation form is also a director, he/she should sign "Consent to Act as Director" on the form. Other directors can either sign the Consent statement in the form or submit a Form NNC3 "Consent to Act as First Director" within 15 days after the date of incorporation of the company (“the prescribed time period”).


Step 2 – Collect Certificates


If the application is approved, please download or collect the Certificate of Incorporation and Business Registration Certificate (hereinafter referred to as "the Certificates"). The Certificates will be issued in electronic form.


The E-Certificate of a private company limited by shares is usually issued within one hour. An email notification for downloading the Certificate will be sent to the message box and the registered email address of the registered user of the application.


Step 3 – Obtain other permits or licences


Please visit the website of the Trade and Industry Department to obtain other licences, permits, certificates and approvals related to Hong Kong's import and export business and other businesses.


Required Documents


Here are some of the documents you will need to set up a company limited by guarantee in Hong Kong:


  • Memorandum of association: The memorandum of association is a legal document that sets out the company's name, objects, and the liability of its members.

  • Articles of association: The articles of association are a legal document that sets out the company's internal rules and regulations, such as its management structure, voting rights, and procedures for winding up the company.

  • Directors' consent forms: The directors' consent forms are documents that confirm that the directors agree to be appointed as directors of the company.

  • Company secretary's consent form: The company secretary's consent form is a document that confirms that the company secretary agrees to be appointed as company secretary of the company.

  • Proof of identity for each director and secretary: This is typically a copy of their passport or Hong Kong identity card.

  • Proof of address for each director and secretary: This is typically a copy of their utility bill or bank statement.


In addition to these documents, you will also need to file a name search with the Companies Registry to check if the name you have chosen is available. You can do this online or by submitting a paper application.


Once you have all of the required documents, you can file them with the Companies Registry.


Incorporation Form (Form NNC1G)

A copy of the company’s Articles of Association

A Notice to Business Registration Office (IRBR1)


Any application for company incorporation will include a simultaneous application for business registration.


Processing Time


The registration process typically takes around 10 working days.


Fees


The total cost of incorporating a company limited by guarantee in Hong Kong can vary depending on the number of members.

Here are the tables summarizing the fees for incorporating a company limited by guarantee in Hong Kong:

Company Registration fee

​Amount

With 25 members or less

(if delivered in electronic form)

(if delivered in hard copy form)

-

HK$155

HK$170

With number of members exceeding 25 but not exceeding 100

(if delivered in electronic form)

(if delivered in hard copy form)

- -

HK$305

HK$340

With number of members exceeding 100, for every additional 50 members (or less) after first 100 members

(if delivered in electronic form)

(if delivered in hard copy form)

- -

HK$18 (maximum HK$925)

HK$20 (maximum HK$1,025)


Business Registration fee and levy

Amount

1-year certificate

Fee HK$2,200 + Levy HK$0 = Total HK$2,200

3-year certificate

Fee HK$5,720 + Levy HK$150 = Total HK$5,870


Branch Registration fee and levy

Amount

1-year certificate

Fee HK$80 + Levy HK$0 = Total HK$80

3-year certificate

Fee HK$208 + Levy HK$150 = Total HK$358


How Bestar can Help


Bestar is a corporate services provider that can help you with the entire incorporation process for a company limited by guarantee (CLG) in Hong Kong. We can help you with the following:


  • Choosing a name: Bestar can help you choose a name for your CLG that is available and meets the requirements of the Companies Registry.

  • Creating the incorporation documents: Bestar can help you create the memorandum of association and articles of association for your CLG. We can also provide you with professional advice on the contents of these documents.

  • Filing the paperwork: Bestar can file the paperwork for your CLG with the Companies Registry.

  • Obtaining a business registration certificate: Bestar can help you obtain a business registration certificate from the Inland Revenue Department.


In addition to these services, Bestar can also provide you with ongoing support for your CLG, such as:


  • Corporate secretarial services: Bestar can provide you with corporate secretarial services, such as maintaining your company's records and filing annual returns.

  • Tax advice: Bestar can provide you with tax advice on your CLG.


If you are considering incorporating a CLG in Hong Kong, Bestar can help you with the entire process. We have a team of experienced professionals who can help you understand the requirements and ensure that your application is complete and accurate.


Here are some of the benefits of using Bestar to help you incorporate a CLG in Hong Kong:


  • Expertise: Bestar has a team of experienced professionals who can help you understand the requirements and ensure that your application is complete and accurate.

  • Convenience: Bestar can help you with the entire incorporation process, from choosing a name to filing the paperwork. This can save you time and effort.

  • Peace of mind: Bestar can provide you with ongoing support for your CLG, such as corporate secretarial services and tax advice. This can give you peace of mind knowing that your CLG is in good hands.


If you are interested in incorporating a CLG in Hong Kong, contact Bestar to learn more about our services.




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