Form of government:Dependent territory
Area:1 104 km2
Currency:Hong Kong Dollar (HKD)
General partnership in Hong Kong
A partnership is defined as an enterprise that is created and owned by two or more persons who have joined together for the purpose of jointly conducting activities and making a profit. Partnerships in Hong Kong, whether general or limited, are governed by the Partnerships Act.
As in the case of private entrepreneurs, in general partnerships each partner is personally liable for the debts and obligations of the enterprise. Moreover, each partner may be responsible for the actions of the other partner (since the actions were committed as a result of the joint activities of the partners).
Advantages of general partnerships:
- Partners are not required to rely on personal sources to raise capital. As sources, you can attract loans from partners and banking organizations provided on the basis of joint assets of partners.
- Partnerships are simple to set up and manage compared to other companies.
- The profitability of the company can be achieved through making effective decisions through the use of resources, knowledge, skills and potential of partners.
Disadvantages of general partnerships
- All partners are personally liable for the debts and obligations of the company.
- As with private entrepreneurs, the personal assets of partnership partners can be used to pay debts or cover losses.
- Partnerships can be disbanded due to the lack of compromise among partners in matters of company management, methods of activity, etc.
- All profits that the company receives must be divided among all partners.
- Each partner is associated with other partners and may be held responsible for the misconduct of other partners.