When searching for company incorporation tutorial, the first step is to always apply for a Certificate of Incorporation (CI) a Business Registration certificate (BR). Both are similar to many novice entrepreneurs, but in fact they are different in nature. In this article, we will explain the difference between a Certificate of Incorporation (CI) and a Business Registration Certificate (BR), and show you which type of company needs to go through the respective procedures.
What is Certificate of Incorporation (CI)?
Certificate of incorporation (CI) is handled and issued by the Companies Registry. All Hong Kong limited companies and overseas companies with a place of business in Hong Kong are required to register with the Companies Registry.
Once a legally eligible company name has been decided with the necessary documents submitted, a Certificate of Incorporation will be issued if the application is approved. The Certificate of Incorporation is a legal document that not only confirms the successful registration of the company, but also proves that the company is a separate legal entity.
Contents of the Certificate of Incorporation
The Certificate of Incorporation specifies the name of the company, the date of incorporation and the company registration number. The company registration number ensures the legal right to operate and may be required when the company opens a bank account and performs other formalities.
What is Business Registration Certificate (BR)?
Business Registration (BR) is administered by the Business Registration Office of the Inland Revenue Department (IRD) and provides business registration services for sole proprietorships, partnerships, local limited companies or non-Hong Kong companies.
Basically, any business that generates profits in Hong Kong requires business registration. According to The Business Registration Ordinance, relevant companies are required to apply for business registration within one month from the commencement date of business and display a valid Business Registration Certificate (BR) at the business place.
What business are required to be registered?
The following commercial activities are obliged to apply a Business Registration Certificate:
- any form of trade, commerce, craftsmanship, profession, calling or other activity carried on for the purpose of gain;
- any club which provides facilities, services and exclusive club premises to its members for social intercourse or recreation;
- every company incorporated in Hong Kong under the Companies Ordinance or non-Hong Kong company that has established a place of business in Hong Kong, regardless of whether it is actually carrying on any business in Hong Kong;
- every non-Hong Kong company that has a representative or liaison office in Hong Kong, or has let out its property situated in Hong Kong, regardless of whether it has established a place of business in Hong Kong; and
- every limited partnership fund registered under the Limited Partnership Fund Ordinance, regardless of whether it is actually carrying on any business in Hong Kong.
Difference between Certificate of Incorporation (CI) and Business Registration Certificate (BR)
The Certificate of Incorporation and Business Registration Certificate are both legal documents that certify the establishment of a company and the validity of its legal operation, but there are some differences between the two. The Certificate of Incorporation is issued by the Companies Registry and establishes a company's corporate status, giving it the right to enter into contracts and liabilities independently, and giving company holders more legal protection; while the Business Registration Certificate is issued by the Inland Revenue Department and represents a company's status as a taxpayer, which is more tax-related in nature.
In addition, if only unlimited companies (including sole proprietorships and partnerships) are set up, there is no need to obtain a Certificate of Incorporation because the proprietor has unlimited liability for the company and the company does not have the status of a separate legal entity, so only business registration is required; whereas a limited company is required to apply for a Certificate of Incorporation and a Business Registration Certificate at the same time.
|Limited company||Unlimited company||Issuing department|
|Certificate of Incorporation (CI)||
|Business Registration Certificate (BR)||
Business Registration Office of the Inland Revenue Department
Can I apply for company registration and business registration at the same time?
Yes, you can. The Inland Revenue Department (IRD) provides one-stop company and business registration services. Anyone who submits an Incorporation Form (NNC1 or NNC1G) or a Non-Hong Kong Company Registration Form (NN1) to the Companies Registry will be deemed to have applied for business registration at the same time, and the applicant only needs to submit the Notice to Business Registration Office together with the business registration fee, very convenient indeed! If you are interested in knowing how much should be paid for the incorporation and registration fee, you can click here.
Both limited companies and unlimited companies need to obtain a Business Registration Certificate (BR) to obtain the right to conduct legal business, but only limited companies need to apply for a Certificate of Incorporation (CI), which establishes the status of the company as a legal entity. The type of company to be set up will have far-reaching influence on the the proprietor’s legal rights in the future, so careful consideration must be made before starting a business!
Once you have made the decision to incorporate a company, paperwork will be coming your way. With a company secretary’s aid, things will certainly get smoother. OneStart Business Centre provides a wide range of services that will get you started from ground zero to daily operation, including company formation, accounting, audit and tax filing, company secretarial services, etc. To get going, call 3575 6888 or WhatsApp OneStart Business Consultants to learn more!