Types of partnerships in Hong Kong
Entrepreneurs who want to create and manage a partnership in Hong Kong need to know the basic particularities of this type of legal entity, the advantages and liabilities it brings for its founders. The partnership is popular in Hong Kong among investors who have the same business purposes. It is created and co-owned by two or more partners who will share profits and depending on the type of partnership, share liabilities.
According to the Partnership Ordinance there are two types of partnerships in Hong Kong:
– General partnership;
– Limited partnership.
Our Hong Kong company formation agents can help you open either one of these business types. With the help of our experts, you and your business partner will register the partnership in the shortest amount of time possible and begin your joint business activities.
Our experts invite you to watch the following video about the characteristics of partnerships in Hong Kong:
Hong Kong general partnerships
The general partnership in Hong Kong involves two or more individuals who are jointly liable for its debts and liabilities. This type of legal entity is easy to set up, has no requirements for minimum share capital and it can be expanded through the addition of new partners, over time.
The disadvantages include the high level of liability for all partners and no distinction between their personal assets and the assets of the business. This is a characteristic shared with the sole proprietorship. Moreover, partners can be held accountable for the wrongdoing of their co-partners,
Hong Kong limited partnerships
The limited partnership works according to the same principles as the general one. Two or more individuals combine their efforts. The most significant difference is that not all partners bear similar liability. In the limited partnership, one of them can act as the general partner and will have all the responsibility while the limited partner will only be liable to the extent of the share capital invested in the business.
Compared to general partnerships, limited ones will generally require more start-up costs. The Hong Kong limited partnership will need to be registered with the Companies Registry. A Certificate of Registration is delivered within approximately five working days. Any changes brought to the partnership after its registration need to be communicated to the Registrar of Companies.
Part of creating and managing a partnership in Hong Kong is also directly concerned with meeting the arising tax and reporting obligations. While partnerships are subject to lighter requirements in the taxation department, our accountants in Hong Kong are ready to answer personalized questions to investors who are currently involved in a partnership for business purposes. Do not hesitate to contact us.
Contact our Hong Kong company formation representatives for assistance during the partnership registration procedure. Our experts are qualified to help you open a company in Hong Kong and with various other services if you are doing business in Hong Kong.
Our team also assists investors with setting up a company in Hong Kong, as opposed to forming a partnership. The incorporation and management of a corporation is understandably different compared to a partnership, the requirements are different and the liability of the company founders is also distinct from that of the partners. Our team can answer your questions if you also wish to know about company creation.