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         Hong Kong Company Formation Q & A       

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ˇ@ ˇ@ Q1: What are the advantages of using limited companies to engage in
           commercial activities?
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ˇ@ ˇ@ A1 Limited companies are companies with limited liabilities. From a legal
        perspective, a limited company is a separate legal entity and thus has the
        capacity to institute proceedings against others or vice versa. Since the liability
        of shareholders is limited to the nominal value of their shareholdings, the maximum
        possible loss of the shareholders could only be the total sum of their investments.
        Generally speaking, the directors and shareholders of the companies are not
        personally liable for the debts of the company.
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ˇ@ ˇ@         Where the investors prefer to adopt other forms, such as sole proprietor or
        partnership, to run their businesses, the liabilities of the investors are unlimited.
        The creditors can hence institute legal proceedings directly against the investors.
        Where the investors cannot repay the debts, the investors are forced into
        personal bankruptcy.
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ˇ@ ˇ@         Nevertheless, incorporating and running a limited company is comparatively more
        costly.
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ˇ@ ˇ@ Q2: What are the requirements of setting up a limited company in HK? ˇ@
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ˇ@ ˇ@ A2 A limited company must have at least 1 shareholder, 1 director, a company
        secretary and a registered office situated in Hong Kong. The shareholder can act
        as the director with no nationality restriction while the Company Secretary must
        be a HK resident or a limited company registered in HK.
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ˇ@ ˇ@         There is no upper limit of the capital of limited companies but it must not less
        than HK$1.00.
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ˇ@ ˇ@ Q3: Do I need to take out the whole amount of share capital when I set up a
           limited company?
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ˇ@ ˇ@ A3 No. This is only an expressed item. Besides, there is no limitation on the amount
        of share capital. Most of the HK Companies are incorporated with a standard
        capital of HK$10,000 divided into 10,000 shares of HK$1.00 each unless otherwise
        advised. Capital Share excess HK$10,000 shall be charged 0.1% stamp duty.
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ˇ@ ˇ@ Q4: What is a Ready-made / Shelf Company? ˇ@
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ˇ@ ˇ@ A4 Some investors may want to start business quickly and use the company name
        to engage in commercial activities. Thus, we have registered a number of
        companies which have not commenced business and have no liabilities or debts
        for clients to purchase. These companies are regarded as Ready-made/ Shelf
        companies. They have been registered in the Companies Registry and have
        acquired the Certificate of Incorporation. After having all the required documents
        and the payment from our clients, we will go to the Business Registration Office
        and obtain a Business Registration Certificate. The whole procedure is then
        completed. It normally takes one to two working days.
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ˇ@ ˇ@ Q5: Is Ready-made limited company involved in liability and commercial dispute? ˇ@
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ˇ@ ˇ@ A5 No, it isnˇ¦t. All Ready-made limited companies are not yet commenced business
        since the Business Registration Certificate is not yet applied. Thus, those
        companies have no legal statues to operate any business.
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ˇ@ ˇ@ Q6:When can I commence the business after acquiring a Ready-made company? ˇ@
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ˇ@ ˇ@ A6 Normally, you can operate your company within 1 ˇV 2 working days. ˇ@
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ˇ@ ˇ@ Q7: What can I get after the registration of a HK Company? ˇ@
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ˇ@ ˇ@ A7 Regardless of setting up a Ready-made or Tailor-made Company, the following
        documents are things that you will get:ˇA
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ˇ@ ˇ@             1.   Original copy of Certificate of Incorporation ˇ@
ˇ@ ˇ@             2.   Original copy of Business Registration Certificate ˇ@
ˇ@ ˇ@             3.   20 printed copy of Memorandum and Articles of Association ˇ@
ˇ@ ˇ@             4.   One statutory book (members register, directors register and share
                  register)
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ˇ@ ˇ@             5.   20 copies of blank share certificate ˇ@
ˇ@ ˇ@             6.   One company seal ˇ@
ˇ@ ˇ@             7.   One pre-ink chop and round chop ˇ@
ˇ@ ˇ@             8.   Duplicate copy of documents filed with Companies Registry in relation to
                  the appointment of directors, secretary, location of registered office and
                  one duly completed share certificate for each of the shareholders
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ˇ@ ˇ@             9.   A minute for opening bank account ˇ@
ˇ@ ˇ@             10. A green box ˇ@
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ˇ@ ˇ@ Q8: Can I change the company name? ˇ@
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ˇ@ ˇ@ A8 Yes. You can change the company name if you need so. However, the name,
        which can be in English or Chinese only or both, cannot be the same or too similar
        as one already registered with Companies Registry. There also exists a HK$290 of
        government charge. It normally takes 7 working days for the whole procedure of
        changing the company name.
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ˇ@ ˇ@ Q9: Can I change the authorized share capital? ˇ@
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ˇ@ ˇ@ A9 Yes, but the procedure of reducing the authorized share capital is more
        complicated. Besides, capital share excess HK$10,000 shall be charged 0.1%
        stamp duty.
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ˇ@ ˇ@ Q10: After forming a limited company in HK, what should I do every year? ˇ@
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ˇ@ ˇ@ A10 HK Limited Company must file the required fees and documents to the
          Companies Registry and Inland Revenue Department every year.
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ˇ@ ˇ@           Companies Registry : ˇ@
ˇ@ ˇ@           An Annual Return with an annual fee should be submitted to the Companies
          Registry in 42 days after the Anniversary. If you miss the deadline of filing, a
          penalty of HK$870 to HK$3,480 will be imposed.
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ˇ@ ˇ@           Inland Revenue Department : ˇ@
ˇ@ ˇ@           You shall renew the Business Registration Certificate and submit the Profits Tax
          Return every year. Generally, the Profits Tax Return will be received by the new
          formed company after 18 months from incorporation.
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ˇ@ ˇ@ Q11: How can I open a bank account after the registration of a HK Limited
            Company? What are the required documents for opening a bank account in HK?
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ˇ@ ˇ@ A11 Each director and shareholder must go to bank in person with a copy of HK
          Identity card/Passport and the documents listed below:
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ˇ@ ˇ@             1. Original and Certificated True Copy of the Certificate of Incorporation ˇ@
ˇ@ ˇ@             2. Original and Certificated True Copy of the Business Registration Certificate ˇ@
ˇ@ ˇ@             3. Certified True Copy of a minute for opening bank account ˇ@
ˇ@ ˇ@             4. Certificated True Copy of Notification of Appointment of Director and
                Secretary
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ˇ@ ˇ@             5. Memorandum and Articles of Association (M& A) ˇ@
ˇ@ ˇ@             6. Identity card or passport of each director and shareholder (Original Copy) ˇ@
ˇ@ ˇ@             7. Supporting of residential address of each director and shareholder
               (such as bill of electricity or water which must show the name and within
                3 months validity)
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ˇ@ ˇ@            Normally, there are three bank accounts for clients to open:
           Saving, Exchange and Current Account.
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ˇ@ ˇ@ Q12: When can the bank account be used? ˇ@
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ˇ@ ˇ@ A12 It depends on different bankers. It generally requires 10-15 working days.
          Clients shall pay for the company search fee on the day you open a bank
          account.
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ˇ@ ˇ@ Q13: If I only possess a mainland identity card, can I still open a bank ˇ@
ˇ@ ˇ@             account in HK? ˇ@
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ˇ@ ˇ@ A13 It depends on different bankers. ˇ@
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         Business Centre Q & A       

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ˇ@ ˇ@ Q1: What is a Virtual Office? ˇ@
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ˇ@ ˇ@ A1 A virtual office is not an actual office. It is a bundle of services that provide all
        the elements of a real office. These include a registered office address, handling
        of mails, parcels and fax, dedicated telephone number provided for answering
        incoming calls in your company name with our professional receptionists.
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ˇ@ ˇ@ Q2: What if I want to bring my own furniture? ˇ@
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ˇ@ ˇ@ A2 You can bring in any furniture provided that it will not damage the fixtures or
         existing furniture.
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ˇ@ ˇ@ Q3: Is there any conference room for rental? What is the price? ˇ@
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ˇ@ ˇ@ A3 Yes. HK$80/hr for existing clients while HK$100/hr for other clients. ˇ@
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ˇ@ ˇ@ Q4: What is the size of the conference room? ˇ@
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ˇ@ ˇ@ A4 It can accommodate at least 6 persons. ˇ@
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ˇ@ ˇ@ Q5: Is there a minimum contract period? ˇ@
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ˇ@ ˇ@ A5 No. You can use our Executive Suite Services for just one-day rental. ˇ@
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ˇ@ ˇ@ Q6: What kinds of payment methods are accepted? ˇ@
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ˇ@ ˇ@ A6 You can pay cash, cheque or deposit directly into our bank account. Cheques
        should be crossed and made payable to ˇ§Raleigh Consultant Limitedˇ¨. Except
        those methods mentioned above, you can also pay by Telegraphic transfer, for
        details, please kindly contact our staff for further information.
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ˇ@ ˇ@ Q7: What if my customer sends me a mail or fax without putting my company name? ˇ@
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ˇ@ ˇ@ A8 The mail or fax will be kept for maximum 1 month. It will be discarded if unclaimed
        after 1 month.
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