Hong Kong Guarantee Company
Registration of a New Company Limited by Guarantee
Incorporation of a Company Limited by Guarantee in Hong Kong
How to Register a New Company Limited by Guarantee - cr.gov.hk
Incorporating a Company Limited by Guarantee in Hong Kong is a common practice for non-profit organizations. Here's a breakdown of key aspects:
Key Characteristics:
Non-Profit Focus:
This structure is primarily designed for organizations with non-profit objectives, such as charities, clubs, and associations.
Profits are reinvested into the organization's goals rather than distributed to members.
Limited Liability:
Members (guarantors) agree to contribute a predetermined amount if the company is wound up.
Their liability is limited to this guaranteed amount, protecting them from further financial risk.
No Share Capital:
Unlike traditional companies, companies limited by guarantee do not have shareholders or issue shares.
Ownership is based on membership.
Essential Requirements:
Members:
Must have at least one member, who can be an individual or a corporation.
There are no nationality restrictions.
Directors:
Must have at least two individual directors.
Corporate directors are not permitted.
Company Secretary:
Required, and can be an individual (Hong Kong resident) or a corporation with a Hong Kong registered office.
Registered Office Address:
Must be located in Hong Kong.
Articles of Association:
A crucial document outlining the company's objectives, member guarantees, and asset distribution upon dissolution.
Incorporation Process:
Name Search:
Conduct a search with the Companies Registry to ensure the chosen name is unique.
Prepare Documents:
Draft the Articles of Association.
Complete the incorporation form (NNC1G).
Gather identification and address proof for members and directors.
File with Companies Registry:
Submit the required documents and pay the necessary fees.
Business Registration Certificate:
Apply for a Business Registration Certificate from the Inland Revenue Department.
Ongoing Obligations:
Maintain Records:
Keep records of members, directors, and financial transactions.
Annual Audits:
Prepare and file annual audited financial statements.
Annual Returns:
File annual returns with the companies registry.
Compliance:
Ensure ongoing compliance with the companies ordinance.
Important Notes:
Obtaining charitable status (Section 88 of the Inland Revenue Ordinance) is a separate process with its own requirements.
It is advisable to seek professional legal and accounting advice when establishing a company limited by guarantee.
Step 1 – Choose the name of company
When choosing a company name for a Company Limited by Guarantee in Hong Kong, it's crucial to adhere to specific regulations to ensure a smooth incorporation process. Here's a breakdown of the key considerations:
Essential Requirements and Restrictions:
Uniqueness:
The proposed company name must be distinct from any existing company registered with the Hong Kong Companies Registry.
Conducting a thorough name search is essential to avoid conflicts.
Language:
Company names can be in English or traditional Chinese.
A combination of English letters and Chinese characters is generally not permitted.
If using Chinese characters, they must be traditional Chinese characters.
"Limited" Requirement:
Generally, an English company name must end with "Limited."
However, in the case of companies limited by guarantee that are for charitable purposes, it is possible to apply to the companies registry to dispense with the word "limited" within the company name.
Chinese company names must end with the characters “有限公司”.
Prohibited Names:
Names that suggest a connection with the Central People's Government or the Hong Kong government are typically prohibited.
Names that are offensive, misleading, or contrary to public interest will also be rejected.
Names that would constitute a criminal offence are prohibited.
Name Search:
It is strongly recommended to perform a name search through the Companies Registry's Cyber Search Centre or the Company Search Mobile Service. This allows you to check for existing company names and potential conflicts.
Practical Tips:
Keep it Clear and Concise:
Choose a name that is easy to remember and reflects the organization's purpose.
Consider Your Target Audience:
Ensure the name resonates with the individuals or groups you intend to serve.
Check for Trademark Availability:
While not mandatory for company registration, it's advisable to check for trademark availability to protect your brand.
Key Actions:
Conduct a Companies Registry Name Search:
Utilize the official resources provided by the Hong Kong Companies Registry to verify name availability.
Consider Professional Advice:
If you have any doubts about the suitability of a name, consult with a professional company secretary or legal advisor.
By following these guidelines, you can increase the likelihood of your chosen company name being approved.
Step 2 – Deliver application
When it comes to delivering your application for incorporating a Company Limited by Guarantee in Hong Kong, it's important to understand the available methods and the required documentation. Here's a breakdown of Step 2: Deliver application:
Methods of Application:
Online via the e-Services Portal:
The Hong Kong Companies Registry offers a 24-hour e-Services Portal. This is often the most efficient method.
Online applications generally have a faster processing time.
Hard Copy Delivery:
You can also deliver the required documents in hard copy to the Companies Registry.
Key Documents Required:
Incorporation Form (Form NNC1G):
This specific form is for companies not limited by shares (i.e., companies limited by guarantee).
It must be accurately completed with the necessary details.
Articles of Association:
This document outlines the company's internal rules and regulations.
It's a crucial legal document that must be carefully drafted.
Notice to Business Registration Office (IRBR1):
This form is for the business registration with the Inland Revenue Department.
Supporting Documents:
Copies of identification documents for directors and members.
Proof of registered office address.
Important Considerations:
Fees:
Ensure you are aware of the current fees for company incorporation.
Fees may vary depending on the method of application.
Accuracy:
Double-check all information provided in the application and supporting documents.
Errors or omissions can cause delays in processing.
Compliance:
Ensure that all documents comply with the requirements of the Companies Ordinance.
Where to Submit:
Companies Registry:
Whether online or in person, the Companies Registry is the central point for company incorporation in Hong Kong.
By carefully preparing your documents and choosing the appropriate delivery method, you can facilitate a smoother incorporation process.
Step 3 – Collect certificates
After your application for incorporating a Company Limited by Guarantee in Hong Kong is approved, the next important step is to collect the necessary certificates. Here's a breakdown of what you'll typically receive and how to obtain them:
Key Certificates:
Certificate of Incorporation:
This is the primary document confirming the legal existence of your company.
It's issued by the Hong Kong Companies Registry.
This certificate is fundamental and will be required for various subsequent activities, such as opening a bank account.
Business Registration Certificate:
This certificate is issued by the Inland Revenue Department.
It signifies that your company is registered for business purposes in Hong Kong.
You'll need this certificate to operate legally.
Collection Procedures:
Companies Registry:
The Certificate of Incorporation is obtained from the Companies Registry.
Depending on whether you applied online or in person, the collection method may vary.
Online applications may offer options for electronic or physical collection.
For in-person applications, you'll likely need to collect the certificate from the Companies Registry's public search center.
Inland Revenue Department:
The Business Registration Certificate is obtained from the Inland Revenue Department.
Similar to the Companies Registry, the collection method may depend on your application method.
Important Considerations:
Verification:
Upon receiving the certificates, carefully verify that all information is accurate.
Record Keeping:
Store these certificates in a safe and secure location. They are essential legal documents.
Digital Copies:
Consider making digital copies of the certificates for backup purposes.
"Certificate of Good Standing" and "Certificate of Incumbency"
It is important to understand that in addition to the initial certificates of incorporation, that there are other certificates that may be needed in the future.
A "Certificate of Good Standing" can be used to prove that a company is compliant with regulations.
A "Certificate of Incumbency" or "Company Particulars Report" gives details of the companies current directors and company secretary.
By following these steps, you can ensure that you obtain the necessary certificates and maintain proper records for your company.
Step 4 – Obtain other permits or licences
After obtaining your Certificate of Incorporation and Business Registration Certificate, the next crucial step is to determine if your company requires any additional permits or licenses to operate legally in Hong Kong. This is "Step 4 – Obtain other permits or licences." The necessity of these additional authorizations depends heavily on the specific nature of your organization's activities.
Here's a breakdown of key considerations:
Factors Determining Licensing Needs:
Nature of Activities:
Certain sectors, such as education, healthcare, and specific social services, often require specialized licenses or permits.
If your company engages in fundraising or charitable activities, you may need to comply with regulations governing those activities.
Industry Regulations:
Hong Kong has specific regulations for various industries. Research the regulations applicable to your sector.
Charitable Status:
While obtaining Section 88 charitable status from the Inland Revenue Department is primarily for tax exemption, it can also influence other regulatory requirements.
Common Licensing and Permit Areas:
Education:
If your organization provides educational services, you may need to obtain licenses from the Education Bureau.
Social Services:
Organizations providing social services may require permits from the Social Welfare Department.
Fundraising:
If your company plans to conduct public fundraising, you may need permits from relevant authorities.
Food and Beverage:
If your organisation intends to provide food and beveradge, then you will need the relevant food liscences.
Other Specific Industries:
Depending on your sector, you may need licenses related to environmental protection, occupational safety, or other areas.
Key Actions:
Identify Applicable Regulations:
Thoroughly research the regulations governing your industry and activities.
Contact Relevant Authorities:
Contact the relevant government departments to inquire about licensing requirements.
Prepare Required Documentation:
Gather the necessary documents for license applications.
Submit Applications:
Submit your applications to the appropriate authorities.
Important Considerations:
Compliance:
Operating without the required licenses can result in penalties.
By carefully assessing your organization's activities and complying with relevant regulations, you can ensure your company operates legally in Hong Kong.
Important Notes
When considering the incorporation of a Company Limited by Guarantee in Hong Kong, several crucial points warrant careful attention. Here's a compilation of important notes to keep in mind:
Key Legal and Regulatory Considerations:
Articles of Association:
This document is paramount. It defines the company's purpose, internal regulations, and how assets will be handled upon dissolution. Ensure it's meticulously drafted to align with your organization's objectives.
Limited Liability:
While members' liability is limited to their guaranteed amount, directors still bear significant legal responsibilities. Understand the scope of director duties and potential liabilities.
Ongoing Compliance:
Maintaining compliance with the Companies Ordinance is an ongoing obligation. This includes filing annual returns, keeping accurate records, and conducting annual audits.
Charitable Status (Section 88):
If your company aims to operate as a charity, obtaining Section 88 status from the Inland Revenue Department is a separate and often lengthy process. Be prepared for additional requirements.
Company Secretary:
The company secretary plays a vital role in ensuring compliance. Choose a reliable individual or firm with expertise in Hong Kong company law.
Registered Office:
Maintaining a valid registered office address in Hong Kong is mandatory. Ensure the address is accurate and up-to-date.
Record Keeping:
It is very important to keep accurate and up to date records of all company dealings. This includes financial records, and records of members, and directors.
Practical Considerations:
Timeframe:
The incorporation process can take time. Factor in potential delays, especially when applying for charitable status.
Financial Management:
Establish sound financial management practices from the outset. This includes maintaining accurate accounting records and ensuring transparency in financial transactions.
By paying close attention to these important notes, you can increase the likelihood of a successful and compliant company incorporation.
Price Guide To Main Services
It's important to understand that the costs associated with incorporating and maintaining a Company Limited by Guarantee in Hong Kong can vary significantly based on the service providers you choose. A general price guide for the main services involved:
1. Company Incorporation:
Government Fees:
Companies Registry Incorporation fee: This fee varies depending on the number of members. Refer to the information provided by the Companies Registry for the pricing.
Business Registration fee: This fee is set by the Inland Revenue Department.
Professional Service Fees:
These fees cover the preparation and filing of incorporation documents.
Packages can range from several thousand Hong Kong dollars (HKD) to higher amounts, depending on the complexity of the Articles of Association and the services included.
Factors that affect these costs are:
Complexity of the Articles of Association.
Whether you also require the company secretary service.
If you require a registered office address service.
It is important to remember that some agencies offer packages that include the company formation, company secretary services, and registered office address services, and those packages will vary in price.
2. Company Secretary Services:
This is an ongoing annual cost.
Fees can vary significantly, ranging from a few thousand HKD per year.
Factors that affect the cost are:
The size of the company.
The amount of work involved.
3. Registered Office Address:
This is also an ongoing annual cost.
Fees can range from a few thousand HKD per year.
4. Auditing and Accounting:
Annual audits are mandatory.
Fees vary depending on the size and complexity of the organization.
5. Section 88 Charitable Status Application:
This is a separate process with its own fees.
Professional fees for assisting with the application can vary significantly.
Key Considerations:
It's crucial to obtain quotes from multiple service providers to compare prices and services.
Be sure to clarify what is included in each service package.
Business Registration Fee and Levy Table
Understanding the Business Registration Fee and Levy in Hong Kong is crucial for anyone setting up a business. Here's a breakdown of the key information:
Key Points:
Business Registration Fee:
This is a mandatory fee for businesses operating in Hong Kong.
As of April 1, 2024, the one-year Business Registration fee is HK$2,200.
You can also opt for a three-year Business Registration, with a corresponding fee.
Levy:
It is important to note that the levy that used to contribute to the Protection of Wages on Insolvency Fund has been temporarily waived for two years, starting from April 1, 2024.
Therefore, for business registrations made after April 1st 2024, that portion of the fee is currently not being charged.
Where to Register:
Businesses must register with the Business Registration Office of the Inland Revenue Department (IRD).
Often, this process is streamlined with company incorporation through the Companies Registry.
Importance:
The Business Registration Certificate is essential for legal business operations in Hong Kong.
Frequently Asked Questions
Company Name
When it comes to company names in Hong Kong, particularly for Companies Limited by Guarantee, several questions frequently arise. Here's a breakdown of common queries and their answers:
Frequently Asked Questions:
Q: Can I use any name I want for my Company Limited by Guarantee?
A: No. There are restrictions. The name must be unique, not offensive, and not misleading. It also cannot imply a connection to the government without authorization.
Q: Does a Company Limited by Guarantee have to include "Limited" in its name?
A: Yes, generally. However, if the company is for charitable purposes, an application can be made to the Companies Registry to dispense with the word "Limited."
Q: Can I use Chinese characters in my company name?
A: Yes, you can use traditional Chinese characters. However, you cannot mix English letters and Chinese characters in the same name.
Q: How can I check if a company name is available?
A: You can conduct a name search through the Companies Registry's Cyber Search Centre or the Company Search Mobile Service.
Q: Are there any words that are prohibited in company names?
A: Yes, certain words that suggest a government connection, are offensive, or are misleading are prohibited.
Q: Can the nationality of the company directors effect the name of the company?
A: No, the nationality of directors and members does not directly restrict the company name itself, provided the name complies with Hong Kong'
A: Generally, abbreviations are acceptable, so long as the name as a whole conforms to the existing regulations, and isn't deemed misleading. But when in doubt, it is best to write the word in its entirety.
Key Takeaways:
Always perform a thorough name search before finalizing your company name.
Ensure your chosen name complies with the Companies Registry's guidelines.
If you intend to operate as a charity, explore the option of dispensing with "Limited" in your name.
Incorporation of a Company Limited by Guarantee
When considering the incorporation of a Company Limited by Guarantee in Hong Kong, it's natural to have numerous questions. Here's a compilation of frequently asked questions, addressing key aspects of the process:
General Incorporation:
Q: What is a Company Limited by Guarantee?
A: It's a company structure primarily used for non-profit organizations where members guarantee to contribute a specific amount if the company is wound up.
Q: Who typically uses this type of company structure?
A: Charities, clubs, associations, and other non-profit organizations.
Q: Can non-Hong Kong residents incorporate a Company Limited by Guarantee?
A: Yes, there are generally no restrictions on the nationality of members or directors.
Q: How many directors are required?
A: At least two individual directors are required.
Q: Do I need a company secretary?
A: Yes, a company secretary is mandatory.
Q: Must the company secretary be a Hong Kong resident?
A: If the company secretary is a natural person, they must ordinarily reside in Hong Kong. If the company secretary is a body corporate, the address of its registered or principal office should be in Hong Kong.
Q: Is a registered office address in Hong Kong required?
A: Yes, the company must have a registered office address in Hong Kong.
Process and Documentation:
Q: What are the key documents required for incorporation?
A: Key documents include the Incorporation Form (NNC1G), Articles of Association, and identification documents for directors and members.
Q: What is the Articles of Association?
A: It's a crucial document outlining the company's objectives, member guarantees, and rules.
Q: Where do I submit the incorporation application?
A: Applications are submitted to the Hong Kong Companies Registry, either online or in person.
Q: How long does the incorporation process take?
A: Online submission: Certificates can be processed in less than 1 hour. For companies limited by guarantee, it typically takes up to 3 weeks. However this can vary.
Q: Do I need a Business Registration Certificate?
A: Yes, you'll need a Business Registration Certificate from the Inland Revenue Department.
Financial and Legal:
Q: Is there a minimum share capital requirement?
A: No, Companies Limited by Guarantee do not have share capital.
Q: What are the ongoing compliance obligations?
A: Obligations include filing annual returns, maintaining accurate records, and conducting annual audits.
Q: How do I obtain charitable status (Section 88)?
A: This is a separate application to the Inland Revenue Department.
Q: What are the liabilities of the members?
A: Members' liabilities are limited to the amount they guarantee to contribute.
Important Considerations:
It's highly recommended to seek professional legal and accounting advice.
Ensure all documents are accurate and comply with the Companies Ordinance.
Business Registration
When it comes to Business Registration in Hong Kong, several questions frequently arise. Here's a breakdown of some common queries and their answers:
Key FAQs:
Q: Who needs to obtain a Business Registration Certificate?
A: Any person or entity carrying on business in Hong Kong is generally required to register. This includes sole proprietorships, partnerships, limited companies, and other business forms. There are some exceptions, such as certain agricultural or charitable activities.
Q: What is the purpose of business registration?
A: Business registration is primarily for tax administration purposes. It allows the Inland Revenue Department (IRD) to keep track of businesses operating in Hong Kong.
Q: How do I register my business?
A:
For companies incorporated in Hong Kong, business registration is often done concurrently with company incorporation through the Companies Registry.
Otherwise, you can apply directly to the IRD's Business Registration Office.
Online applications are also available.
Q: What is the Business Registration Number?
A: This is a unique number issued by the IRD. It serves as a business identifier and is used for tax-related matters. It is also now referred to as the Unique Business Identifier (UBI).
Q: How much does business registration cost?
A: The fees vary depending on the validity period of the certificate (one year or three years). Check the IRD website for the fee schedule.
Q: Where do I display my Business Registration Certificate?
A: The certificate should be displayed prominently at the business premises.
Q: Do I need to renew my Business Registration Certificate?
A: Yes, the certificate must be renewed before it expires.
Q: What happens if I don't register my business?
A: Failure to register a business is a legal offense and can result in penalties.
Q: Where can I find the most accurate and up to date information?
A: The Inland Revenue Department (IRD) website is the best source for official and current information.
Important Notes:
Always refer to the official IRD website for the latest regulations and fee schedules.
Ensure you understand the specific requirements for your business type.
Common Seal
When discussing the "common seal" in the context of Hong Kong companies, it's important to understand the changes brought about by the revised Companies Ordinance. Here's a breakdown of frequently asked questions:
Key FAQs:
Q: What is a common seal?
A: A common seal, also known as a company seal or corporate seal, is a tool used by companies to authenticate documents. Historically, it served as a formal mark of the company's agreement.
Q: Is a common seal mandatory in Hong Kong?
A: No. Since the new Hong Kong Companies Ordinance came into effect in 2014, it is no longer mandatory for Hong Kong companies to have a common seal. It is now optional.
Q: Can a company still use a common seal if it wants to?
A: Yes. Companies can choose to continue using their common seals if they wish.
Q: If a company doesn't use a common seal, how are documents authenticated?
A: Documents can be authenticated through:
The signature of a single director.
The signatures of two or more directors.
The signature of the company secretary.
Q: What are the implications of the change in the law?
A: The change provides greater flexibility for companies in how they execute documents. It simplifies administrative processes.
Q: If a company does use a common seal, are there any regulations?
A: Yes. If a company uses a common seal, it should adhere to the regulations within their companies articles of association, and Section 127 of the Hong Kong companies ordinance.
Q: Where can I get a common seal?
A: Common seals can be obtained from various suppliers that specialize in company seals and stamps.
Key Considerations:
While no longer mandatory, some companies may still find a common seal useful for certain types of documents or transactions.
It's essential to understand the alternative methods of document authentication provided by the Companies Ordinance.
Where to Find Official Information:
For accurate and up-to-date information, consult the official websites of:
Hong Kong Companies Registry: For company incorporation fees and regulations.
Inland Revenue Department (IRD): For business registration fees, charitable status details, and all related tax matters.
How Bestar can Help
How to Register a New Company Limited by Guarantee - cr.gov.hk
Bestar plays a vital role in ensuring a smooth and compliant business operation in Hong Kong. Here's how we can help:
Company Incorporation:
Drafting and reviewing the Articles of Association.
Ensuring compliance with the Companies Ordinance.
Advising on legal structures and implications.
Handling legal documentation and filings.
Compliance and Governance:
Advising on ongoing legal obligations.
Ensuring adherence to regulatory requirements.
Handling legal disputes and contracts.
Licensing and Permits:
Assisting with applications for necessary licenses and permits.
Advising on industry-specific regulations.
Contractual Matters:
Drafting and reviewing contracts.
Advising on contractual obligations.
Financial Reporting:
Preparing and auditing financial statements.
Ensuring compliance with accounting standards.
Providing financial analysis and advice.
Tax Compliance:
Handling tax filings and compliance.
Advising on tax planning and optimization.
Assisting with applications for charitable status (Section 88).
Bookkeeping and Record Keeping:
Setting up and maintaining accurate financial records.
Payroll Services:
Handling payroll and complying with related regulations.
Company Secretarial Services:
Acting as the company secretary.
Maintaining statutory records.
Filing annual returns and other required documents.
Ensuring compliance with company ordinance.
Registered Office Address:
Providing a registered office address in Hong Kong.
Business Advisory:
Offering guidance on business setup and operations.
Assisting with administrative tasks.
Designated Representative Services:
Providing services to act as the companies designated representative, regarding the Significant Controllers Register.
In essence, Bestar provides:
Expertise: We possess in-depth knowledge of Hong Kong's legal and financial regulations.
Compliance: We ensure your business operates within the bounds of the law.
Efficiency: We streamline administrative processes, saving you time and resources.
Risk Mitigation: We help you avoid potential legal and financial pitfalls.
By engaging Bestar, you can focus on your core business activities with confidence, knowing that your legal and financial affairs are in capable hands.
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