What is an unlimited company in Hong Kong?

Unlimited Company Hong Kong: Definition and Liability

An unlimited company in Hong Kong is a company registered under the Companies Ordinance (Cap. 622) whose members' liability is not limited by shares or guarantee. If the company cannot meet its obligations, each member is liable for the company's debts to the full extent of their personal assets.

An unlimited company Hong Kong may or may not have a share capital. Incorporate it using Form NNC1G, not Form NNC1 which is for companies limited by shares. The company must appoint a company secretary, maintain a registered office, and adopt articles of association.

Unlimited companies are rare. They are used in specific group structures where a parent company wishes to avoid public disclosure of financial statements, as unlimited companies are generally exempt from filing audited accounts with the Companies Registry. They must still file an annual return on Form NAR1 and maintain statutory registers.

Hong Kong Unlimited Company Liability

Members of an unlimited company face personal exposure for the company's debts. During a liquidation, whether by creditors' voluntary liquidation or compulsory winding up, the liquidator may call on members to contribute to satisfy outstanding liabilities. This liability extends to former members who ceased to be members within one year before the commencement of winding up, in respect of debts contracted while they were members.

Unlimited Company Structure

An unlimited company structure can be either private or public. Private unlimited companies are more common. The company must have at least one director who is a natural person and at least one member. There is no minimum share capital requirement if the company has a share capital.

Unlimited Company vs Limited Company

The key distinction between an unlimited company vs limited company is liability. In a limited company, members' liability is capped at the unpaid amount on their shares. In an unlimited company, members are personally liable for all debts. Limited companies must file audited financial statements publicly. Unlimited companies are exempt from this disclosure, providing privacy.

Hong Kong Company Types

Hong Kong company types recognised under Cap. 622 include private companies limited by shares, public companies limited by shares, companies limited by guarantee, and unlimited companies. Each type has distinct incorporation requirements, liability rules, and filing obligations. Form an unlimited company by filing Form NNC1G with the Companies Registry. It is subject to the same ongoing compliance obligations regarding directors, company secretary, and the Significant Controllers Register.