An Easy Guide to Maintain Your New Business | Article – HSBC VisionGo
BRIDGES’ webinar on “How to build your brand on Instagram and the subsequent actions for long-term business planning” was successfully held on 15 September. Below is an overview of business incorporation basics that are often confusing to some. We have summarised the most asked questions here which will answer yours.
Q1: What is the difference between Business Registration Certificate (BR) and Certificate of Incorporation (CI)?
Answer: BR is obtained via the Business Register under the Inland Revenue Department (IRD) of Hong Kong. It is a document that shows a company is valid and legally registered. It should be displayed at the company’s premises and be renewed every year.
As for CI, it is issued by Company Registry which includes information of registration number, certificate type, official company name and establishment date. However, only limited companies are issued with this certificate.
Q2: When should the business owner apply for business registration?
Answer: The Business Registration law requires every individual who owns a business in Hong Kong, to apply for BR within one month from the commencement of such business, regardless of its form and size. In short, an Instagram store is also obliged to apply for a BR. However, if the average monthly turnover of the registered business (for a business mainly generates profit from sales of service) doesn’t exceed HK10,000, the registration fee is waivable.
Q3: What is the application procedure of BR and how long does it take?
Answer: The business owner could submit the application form in person to the Business Registration Office, by post or online. BR application can also be submitted simultaneously along with the CI application in Company Registry. The Certificate can be grounded on the same day of application.
BRIDGES EXECUTIVE CENTRE provides a one-stop-shop company incorporation service, all the processes and other relevant document submissions will be handled by the knowledgeable team, if any.
Q4: What is the difference between limited company and unlimited company?
Answer: The former is limited liability for shareholders of the company as all risks of business operation, the latter is unlimited liability for the owner of the company as all risks of business operation and liabilities should be born by Proprietor or Partner.
A limited company is arguably the most common company type for trading business in Hong Kong. Mainly because such entity facilities business expansion by enabling business owners to issue new shares to shareholders, which makes bringing in investment an easy task. Moreover, since annual statutory audit is mandatory for all limited companies, it is easier to secure bank loans for this entity type than the others as it offers a more transparent financial reflection of the business.
Q5: Is Mandatory Provident Fund (MPF) a must for self-employed persons?
Answer: Yes. Whether you are a sole proprietor or a partner of a partnership business, it is compulsory to get an MPF. If the Director of a limited company needs to handle daily operations (usually known as Executive Director) and receives a salary like other employees in the company, they must contribute to the MPF.
However, a Non-Executive Director - a member of the board of directors in the company but not part of the executive team – who receives remuneration for serving as a director of the company, needs not to contribute to the MPF.
More questions? Contact BRIDGES company incorporation team by calling +852 2159 9666 or email firstname.lastname@example.org today.