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[Online Store Business] Should an Online Store Choose a Limited Company or an Unlimited Company?
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The new year is the best time to turn your entrepreneurial vision into action.
A successful entrepreneurial journey is not achieved overnight. It requires a clear understanding of every step, process, and key considerations. This article provides a detailed guide on setting up a limited company in Hong Kong, covering company registration, opening a bank account, and addressing common issues faced during the startup process. Let us help turn your entrepreneurial dreams into a feasible business plan and start your journey to success!
1. Steps to Start a Limited Company
Develop a Detailed Business Plan
To successfully establish a limited company, the first step is to create a clear business plan:
Define Business Direction: A clear business plan helps you identify your company’s core values, target market, and revenue model.
Calculate Initial Costs: This includes registration fees, operating costs, and initial marketing budgets.
Risk Assessment: Consider potential legal, financial, and market risks, and develop contingency plans.
Choose a Company Name
When choosing a company name, keep the following in mind:
Avoid Duplication: Conduct a company name search to ensure it is not identical or similar to existing companies.
Legal Compliance: Refer to "Guidelines on Company Name Registration" to ensure compliance with Hong Kong regulations.
Prepare Required Registration Documents
The following documents are required to register a limited company:
Company Registration Form (Form NNC1): Includes basic company details, and personal information of directors and shareholders.
Articles of Association: Outlines the company’s operational norms, share capital structure, and shareholding arrangements.
Director and Shareholder Information: Submit complete information for all directors and shareholders, including signatures.
Appoint a Company Secretary
Under the Companies Ordinance, every limited company must appoint a company secretary:
Statutory Requirement: The company secretary can be a Hong Kong resident or a registered company.
Main Responsibilities: Includes managing company records, preparing annual reports, and handling board matters to ensure legal compliance.
Four Mandatory Registers: Prepare and maintain the following four registers for inspection by enforcement authorities upon request:
- Register of Members (ROM)
- Significant Controllers Register (SCR)
- Register of Directors (ROD)
- Register of Company Secretaries (ROCS)
For more information on company secretary services, refer to: Company Secretary Services
Apply for a Business Registration Certificate (BR)
The Business Registration Certificate is essential for lawful business operations:
Application Deadline: Apply to the Inland Revenue Department within one month of company establishment.
Fees: 1-year certificate: HK$2,200; 3-year certificate: HK$5,720 (subject to the latest government announcement).
2. Opening a Company Bank Account
Importance of a Company Bank Account
Opening a company bank account is a critical step in the entrepreneurial process:
Legal Compliance: Hong Kong banks prohibit using personal accounts for business purposes. Violations may lead to account freezing.
Accounting and Tax Filing: Keeping company finances separate from personal finances helps in accurate bookkeeping and tax compliance.
Enhances Business Credibility: Having a dedicated company account builds trust with clients and business partners.
For more information on opening company bank accounts, refer to: Opening a Company Bank Account
3. FAQs About Starting a Company
When Should You Apply for a Business Registration Certificate?
Apply within one month of company formation; failure to do so may result in penalties.
Capital Requirements for Starting a Company
Minimum Capital: Hong Kong limited companies generally do not have a minimum capital requirement, but an initial capital of at least HK$10,000 is recommended to demonstrate operational capacity.
Do Dormant Companies Need to File Taxes?
Dormant companies still need to undergo auditing and tax filing, stating no business activities were conducted, to comply with tax regulations.
For more information on accounting and tax services, refer to: 【Support for SMEs!】Accounting Audit and Tax Filing Service Up to HK$1,000 Cash Back
4. Conclusion
Although establishing a limited company involves numerous steps, following a well-prepared process can significantly reduce errors and save time. Consider seeking professional services to handle registration and account opening, ensuring a smooth start to your entrepreneurial journey!
If you have other questions about starting a limited or unlimited company, feel free to consult OneStart Business Centre. We provide comprehensive support to entrepreneurs, including company formation, company secretarial services, accounting and auditing, tax filing, serviced and virtual offices, and more. Let us handle the administrative burdens so you can focus on growing your business. To get started immediately, call 3575 6888, or contact us via WhatsApp to learn more.
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