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

2 －20

1 －50

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

Pay Business registration fee per year, but in some circumstances can be waived upon application.

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.

For Setting Up of Hong Kong Unlimited Company, please click Contact Us