Transforming your sole-proprietorship or partnership into a limited company in Hong Kong can be a strategic move for your business, offering benefits like limited liability and increased credibility. However, it's important to understand the process and implications before proceeding.
Here's an overview of the key points:
Process:
Set up a new limited company: You'll need to register a new limited company with the Companies Registry in Hong Kong. This involves choosing a company name, appointing directors and a company secretary, and filing incorporation documents.
Transfer assets and liabilities: Once the company is incorporated, you'll need to transfer the assets and liabilities of your sole proprietorship or partnership to the new company. This may involve legal agreements and tax considerations.
Cancel existing registration: After transferring assets and liabilities, you can cancel the registration of your sole proprietorship or partnership.
Considerations:
Limited liability: This is a key advantage. As a shareholder in a limited company, your liability is limited to the amount you invested in the company. Your personal assets are protected from business debts.
Taxation: Converting your business structure may affect your tax obligations. Consult a tax advisor to understand the implications.
Compliance: Limited companies have more compliance requirements compared to sole proprietorships and partnerships. You'll need to file annual returns and hold meetings as per regulations.
Cost: Incorporating a company and transferring assets involve professional fees and potential tax implications.
Consult with an accountant familiar with Hong Kong business regulations before making any decisions.
Additional resources:
How Bestar can Help
Here are some areas where Bestar is able to help:
1. Company Incorporation:
Assisting with company name selection and availability checks.
Preparing and filing incorporation documents with the Companies Registry.
Appointing directors and a company secretary (if required).
Obtaining necessary business licenses and permits.
2. Transferring Assets and Liabilities:
Drafting legal agreements for transferring assets and liabilities to the new company.
Advising on potential tax implications of the transfer.
Coordinating with relevant authorities (e.g., banks, landlords) to update ownership information.
3. Business Registration Cancellation:
Assisting with the cancellation of your sole proprietorship or partnership registration.
Ensuring all legal and tax obligations are met before closure.
4. Additional Services:
Providing ongoing compliance support (e.g., annual returns, meetings).
Offering tax advice and accounting services.
Assisting with opening corporate bank accounts.
Registered office services.
Contact Bestar today!
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