Advantages of a Limited Company

The key advantage of limited company over other forms of business are as below:-

Separate Legal Entity: A private limited company has a legal identity of its own, distinct from its members. This enables the company to acquire assets, go into debt, enter into contracts, sue or be sued in its own name.
Limited Liability: The liability of the of the shareholders is limited to the amount of their respective shareholdings/investment.
Perpetual Succession: A change of membership does not affect the company’s continued existence. Shares can be easily transferred and changes in shareholders has no bearing on the business operations of the company. This means the company has perpetual succession notwithstanding the death, resignation or insolvency of shareholders or directors.
Ease of Raising Capital: Business expansion is facilitated by the ease of raising finances, by bringing in new shareholders or issuing more shares to existing shareholders. It is easier for limited companies to secure bank loans when compared to other business entity types.
Positive Image: Private limited companies are taken more seriously when compared to sole proprietorships and partnerships and investors are more willing to contribute their resources to private limited companies.
Easier Transfer of Ownership: Complete or partial transfer of ownership of companies can be done by selling all or part of its total shares, or through the issue of new shares to additional investors. Business operations can continue unaffected and legal documentation is not complicated.
Tax Benefits and Incentives: There are several tax benefits that private limited companies enjoy in Hong Kong. Corporate tax, (or profits tax as it is called), is set at 16.5% of assessable profits for corporations. Hong Kong follows a territorial basis of taxation. Hence, only profits which arise in or derived from Hong Kong are subject to tax in Hong Kong. There is no capital gains tax, withholding tax on dividends and interest and no sales tax or VAT in Hong Kong.

Tax Benefits and Incentives: There are several tax benefits that private limited companies enjoy in Hong Kong. Corporate tax, (or profits tax as it is called), is set at 16.5% of assessable profits for corporations. Hong Kong follows a territorial basis of taxation. Hence, only profits which arise in or derived from Hong Kong are subject to tax in Hong Kong. There is no capital gains tax, withholding tax on dividends and interest and no sales tax or VAT in Hong Kong.