What is a partnership under Hong Kong law?

Partnership Hong Kong: Structure and Liability

A partnership in Hong Kong is an unincorporated business structure governed by the Partnership Ordinance (Cap. 310). It has no separate legal personality. Partners are jointly liable for the debts and obligations of the business. The structure is formed by two or more persons carrying on a business in common with a view to profit, and registration is with the Inland Revenue Department rather than the Companies Registry.

Hong Kong Business Partnership

A Hong Kong business partnership is a contractual relationship, typically documented in a partnership agreement. Partners share profits and losses according to the terms of that agreement or, in its absence, equally under the Partnership Ordinance. The structure is unincorporated, meaning the firm cannot hold property or sue in the firm name alone. Each partner is an agent of the partnership, and acts within the ordinary course of business bind all partners.

Partnership Ordinance Hong Kong

The Partnership Ordinance (Cap. 310) sets out the legal framework for partnerships. It defines the relationship between partners, the nature of partnership property, and the rules for dissolution. Every partnership must be registered with the of the Inland Revenue Department. Apply for the business registration certificate on Form IRBR1. The partnership must file a profits tax return on Form BIR52 as a person other than a corporation.

Starting a Partnership Hong Kong

Starting a partnership involves fewer formalities than incorporating a company. The partnership agreement should be in writing but is not legally required for validity. You must apply for a business registration certificate from the Inland Revenue Department and maintain the required records. Partners must notify the IRD of changes to the partnership.

Partnership Liability Hong Kong

Partnership liability is personal and unlimited. Each partner is jointly liable for all debts and obligations incurred while a partner. A creditor may sue any or all partners individually for the full amount. This joint liability applies even if a partner did not personally participate in the transaction that created the debt. To limit liability, form a limited partnership under the Limited Partnerships Ordinance (Cap. 37). At least one general partner retains unlimited liability while limited partners contribute capital only.