Public company in Hong Kong

Public company limited by shares

A public company limited by shares is a company that can have more than 50 shareholders. In companies of this type, shares and debt obligations are placed publicly. As a general rule, medium or large companies that have achieved significant growth in their industry decide to increase the number of shareholders. The shares of most public companies are listed on the stock exchange. Public companies listed on the stock exchange are subject to strict rules, as they increase their capital with funds raised from the general public. The advantages of public companies are that access to their capital is simple, they are subject to public opinion, it is easy to make mergers and acquisitions with such companies. Among the shortcomings, it is worth noting the obligation to disclose information, the complexity and high cost of creating and managing such companies; takeover risks; distribution of profits and the need to comply with the requirements of current legislation.

A public company whose liability of shareholders is limited by funds

Companies of this type do not have a formed authorized capital. Its members undertake to guarantee/take on themselves the obligation to contribute a predetermined amount to the obligations of the company, which arise if the company is liquidated. The advantage is that the liability of the members is limited, but they retain democratic control over all company activities. Among the shortcomings are the impossibility of distributing profits and the insufficient amount of working capital. Companies of this type are designed to create non-profit organizations that intend to operate in Hong Kong.

Limited Liability Companies

A limited liability company may be formed in Hong Kong by registering with the Companies Registry in accordance with the provisions of the Hong Kong Companies Law. The company is a legal entity that operates separately from the shareholders. Both limited and unlimited companies can be created. Investors rarely resort to the creation of companies with unlimited liability. Limited liability companies may be formed as private or public companies, companies limited by shares, or companies limited in amount. The most common form of companies used by investors is considered to be a private limited company, where the liability of the members is limited by their contribution to the authorized capital, and the personal assets of the members are protected from the obligations of the company.

Hong Kong Corporate Law