Starting a business is a popular choice for taking up a new career route. It must be fun to brainstorm about your brand and products. However, so much paperwork needed to be done to actually incorporate a company, such as company search, company registration, business registration, certificate of incorporation (CI) application etc., missing any documents or fees will delay the application. Surely, you would not want that to obstruct your business opportunity! This article will summarize the key points of forming a company and what documents you need to hand in.
Company Search: Is the Company Name Unique Enough?
Company name is one of the most prominent representatives of your brand. It is also one of the first things people love to imagine when they dream of starting a business. However, your company name must be unique. If it appears identical with other companies, the Companies Registry will not approve the application. If the name is too similar to an existing company, not only the application may fail, infringement of the intellectual property rights of others may also occur.
If you want approval on your company name, it is best to check it by the full name on the Cyber Search Centre of the Companies Registry. You can also visit Intellectual Property Department's Online Search System to check for trademarks and patents. You should also refer to the "Guideline on Registration of Company Names for Hong Kong Companies" to ensure your ideal company name fits the guideline.
Company Types: Limited Company VS Unlimited Company?
Various types of companies can be established in Hong Kong, such as limited companies, unlimited companies, sole proprietorships, partnerships, offshore companies, etc. Before starting one, you must choose a type vigilantly. "Limited company" and "unlimited company" are some popular choices. The two types have remarkable differences in legal status, debt commitment, and year-end tax arrangements.
Limited company in Hong Kong
In terms of legal status, a limited company is a corporate organization with independent legal status. A limited company is established by one or more shareholders. Asset owning and contract signing are practiced in the name of the company. When the company suffers losses, the debts of shareholders are limited to the amount of their own capital contributions. The company is responsible for its own losses. Even if the company is insolvent and needs to be liquidated, it will not involve the personal property of the shareholders, hence greater protection is granted to the shareholders.
For annual tax return, a limited company must arrange an independent accountant to submit an audit report to the Inland Revenue Department every year. The first Profits Tax form is received 18 months after the incorporation of the company. The filing period for the first Profits Tax return is within three months, and within one month thereafter. According to the two-tiered rates, the assessable profits of a limited company is 8.25% for the first two million Hong Kong dollars, and 16.5% for the subsequent assessable profits.
Unlimited company in Hong Kong
An unlimited company has no legal person status. The proprietor owns the assets and signs the contract in the name of a private person or partnership. The proprietor has unlimited liability for the company's debts, and the proprietor also needs to use his/her private property to repay the debt. Incorporating an unlimited company does not require an audit for the year-end tax. Instead, the proprietor needs to declare personal income tax and all private expenses, such as the proprietor's salary.
Company Incorporation Application Forms
After performing Company Search and selecting the company type, you can move on to the papers. There are three application forms "Incorporation Form", "Articles of Association" and "Notice to the Business Registration Office" with related fees required. Applicants can download the forms through the Companies Registry website, and then submit through e-Registry or in person at the Registry.
Form NNC1 is required to form a company limited by shares, and Form NNC1G is required for companies not limited by shares. In addition to the company name and company address, the form also requires the following information:
- Share capital and initial shareholdings on the company's formation
- Founder members' name and addresses, amount of share capital to be subscribed
- Company secretary's name and address, ID card or passport number
- Director's (Natural Person and Body Corporate) name and address, ID card or passport number
If you intend to submit in person, all information displayed on the form must be printed by computer. The Companies Registry does not accept handwritten forms.
Articles of Association
Articles of Association must be submitted together with the Company Incorporation Form. Applicants can refer to the samples on the Companies Registry website. Generally, you can fill in the simplified version when establishing a private company. The content of the Articles mainly covers the company's Chinese and English names, the amount of shares when the company is formed, the Chinese and English names of the founding members, and the amount of subscribed share capital etc.
Notice to the Business Registration Office (IRBR1)
Notice to the Business Registration Office (IRBR1) must besubmitted along with the correct business registration fee and levy, the Articles of Association and the Company Incorporation form. The IRBR1 form can also be downloaded from the Companies Registry website. On IRBR1, applicants only need to choose whether to apply for a three-year business registration certificate. The business registration certificate is classified to one-year and three-year respectively. The total fee for the one-year certificate is HK$150 (fee $0 + levy $150), and the total fee for the three-year certificate is HK$3650 (fee $3200 + levy $450).
Company registration fee
In addition to the business registration certificate fee, there is also a company registration fee. The fee delivered in electronic form is HK$1545, and that delivered in hard copy form is HK$1720.
With the three aforementioned documents, and the two types of fees prepared, your application can be submitted to the Companies Registry. If an applicant chooses a one-year business registration certificate and pay the company registration fee via hard copy form, the fee will be HK$1870; if the applicant chooses a three-year business registration certificate and pay the company registration fee via electronic form, the fee will be HK$5195. Government approval takes 7-10 working days. After that, Companies Registry will notify the file submitter to collect the relevant certificates.
Where to find a Company Secretary? Startups Having Trouble Filing Tax?
To form a company in Hong Kong, you must first conduct a Company Search to ensure uniqueness of company name, select the company type and fill in the three forms: the Incorporation Form, Articles of Association, and IRBR1 form. The fees of business registration and company registration must be paid also. The forms require information of the founder, company secretary, company address and shareholdings. Many start-ups may not have employees skillful enough to be the company secretary, entrepreneurs can benefit from a variety of business services, of which are offered by OneStart Business Centre. OneStart provides professional secretarial services, helps submit government documents on time, avoids legal liabilities for companies and their directors, also handles follow-ups, such as updating the business registration certificates, submitting annual returns, etc., entrepreneurs can hence focus on developing business.
Besides, OneStart offers one-stop accounting and audit services. To save time and energy, all you need to do is providing OneStart's accountants your company's invoices. Choosing OneStart as your tax representative can even postpone tax filing for 3-6 months.
OneStart offers great assistance to entrepreneurs who hope to focus on business development, while not being familiar with official documents. Its service package covers company incorporation and its follow-ups. In addition to the above-mentioned document preparation, its services also include Green Box preparation, business address rental, bank account opening, MPF and labor insurance consultation, etc. Over the past 17 years, OneStart has helped more than 17,000+ entrepreneurs to form companies, feel free to call 3575 6888, or Whatsapp our staff to learn more!
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