HK Unlimited
Hong Kong Unlimited Company Formation
What is Unlimited Company？
There is unlimited liability for the owner of the company as all risks of business operation and liabilities should be borne by Proprietor or Partners. In case of bankruptcy, the creditors have right to claim against the private assets of proprietor or partners.
People who commence his own business shall fully consider the form of company : Limited Company v.s. Unlimited Company.
| Comparison with unincorporated business | |||
|---|---|---|---|
| Sole proprietorship | Partnership | Corporations | |
| No. of owner(s) | 1 Member | 2 －20 Members | 1 －50 Members |
| Legal status | No legal status, one can only own assets and sign contracts in proprietor’s name | No legal status, one can only own assets and sign contracts in partner’s name | Have independent legal status. |
| Debt and liability | Unlimited liability, proprietor faces risk of personal liability or even bankruptcy | Unlimited liability, partners face risk of personal liability of even bankruptcy. | Liability of shareholders are limited to issued shares. Company liquidation normally not affect individual shareholders. |
| Tax issues | No statutory audit is required. Private expenses such as Proprietor’ and spouse’ salaries are not tax deductible. | No statutory audit is required. Private expenses such as Partners and spouses’ salaries are not tax deductible. | Annual statutory audit is required. Directors’ remuneration are tax deductible. |
| Others | No statutory audit is required. Private expenses such as Proprietor’ and spouse’ salaries are not tax deductible. | Pay Business registration fee per year, but in some circumstances can be waived upon application. | Pay Business registration fee and annual return fee to Companies registry per year. |
