Registration of a Limited Partnership in Hong Kong
- Roger Pay
- Jun 22, 2024
- 4 min read
Registration of a Limited Partnership in Hong Kong
Limited Partnership
A Limited Partnership (LP) in Hong Kong offers a business structure with some key advantages:
Benefits:
Limited Liability for Limited Partners: Limited partners' liability is restricted to the amount of capital they contribute to the LP. Their personal assets are not at risk for business debts or wrongdoings by other partners.
Pass-through Taxation: LPs benefit from pass-through taxation. Profits are not taxed at the LP level but are instead passed on to individual partners and taxed on their personal tax returns. This avoids double taxation faced by corporations.
Flexible Management Structure: An LP can have one or more general partners who manage the business and take full responsibility for its operations. Limited partners typically have no involvement in day-to-day management decisions.
Things to Consider:
Limited Partner Restrictions: Limited partners cannot actively participate in managing the LP. Excessive involvement could jeopardize their limited liability protection.
General Partner Responsibility: The general partner(s) have unlimited liability for the LP's debts and obligations.
Registration Requirements: LPs must register with the Companies Registry in Hong Kong. There are specific forms, fees, and potential ongoing compliance needs.
Is an LP Right for You?
An LP can be a good option for businesses where:
Investors seek limited liability protection.
The business requires active management by a dedicated general partner.
Pass-through taxation is desirable.
Alternatives:
Sole Proprietorship: Offers full control and easy setup but comes with unlimited liability.
Limited Liability Company (LLC): Provides limited liability for all members but involves more complex formalities.
Getting Started:
If you're considering an LP in Hong Kong, here are some next steps:
Research: Learn more about LP regulations and how they compare to other structures.
Draft a Partnership Agreement: Outline the rights, responsibilities, and profit-sharing arrangements for all partners.
Detailed Guide on Registering a Limited Partnership (LP) in Hong Kong
Here's a comprehensive overview of registering a Limited Partnership (LP) in Hong Kong:
Before You Begin
Partnership Agreement: Draft a Limited Partnership Agreement outlining the rights, responsibilities, profit-sharing mechanisms, and contribution details of all partners. This agreement is not mandatory for filing with the Companies Registry, but it's crucial for smooth operation and resolving potential disputes. Consider seeking legal advice to ensure the agreement is legally sound.
Registration Process
1. Prepare the Required Documents: Complete the prescribed forms provided by the Companies Registry:
Form 1: Notice of Registration of a Limited Partnership: This form captures essential details of your LP, including:
Proposed LP name (check for availability beforehand)
General Partner(s) information (name, address, nationality, ID number)
Limited Partner(s) information (similar to General Partner details, plus details of contribution)
Business nature and address
Date of commencement of business operations
2. Submission Methods: You can submit the documents in person or electronically through the e-Services Portal if you're a registered user.
In-Person: Submit the completed forms and any required documents (like ID proof) to the Companies Registry.
Electronic Submission (e-Filing): Registered users of the e-Services Portal can submit documents electronically. This method offers faster processing times.
Additional Considerations
Business Registration Certificate: After successful LP registration, obtain a Business Registration Certificate from the Inland Revenue Department (IRD). This is necessary to operate your business legally in Hong Kong.
Limited Partnership Funds (LPFs): This is a specific type of LP structure designed for private investment funds. LPFs have additional registration requirements and regulations to comply with.
Processing Time
Usually 5 working days
Fees
The registration fee for a Limited Partnership (LP) in Hong Kong consists of two parts:
Base Registration Fee: This is a fixed fee payable for registering the LP itself. The current base fee is HK$340.
Variable Capital Contribution Fee: This fee is calculated based on the total amount of capital contributed by all the Limited Partners in your LP. The current rate is HK$8 for every HK$1,000 (or part thereof) of the total contribution amount.
For example, if the total capital contribution by all Limited Partners is HK$20,000, the variable fee would be HK$8 per HK$1,000 x 20 (HK$1,000 increments) = HK$160.
Therefore, the total registration fee for an LP with a capital contribution of HK$20,000 would be HK$340 (base fee) + HK$160 (variable fee) = HK$500.
Resources
Companies Registry - Registration of a Limited Partnership: This webpage provides a detailed guide with downloadable forms and information on fees https://cr.gov.hk/.
How Bestar can Help
Here's how Bestar can help with registering a Limited Partnership (LP) in Hong Kong:
Streamlining the Process:
Form Completion: We can ensure the registration forms (Form 1 and potentially Form 2) are filled out accurately and completely, minimizing the risk of delays or rejections from the Companies Registry.
Document Preparation: Bestar can assist in drafting a legally sound Partnership Agreement, which outlines the rights, responsibilities, and profit-sharing mechanisms for all partners. We help with document compilation.
Electronic Submission (e-Filing): If you choose electronic submission, we can handle the process through the e-Services Portal, saving you time and ensuring proper filing procedures.
Ensuring Compliance:
Regulation Awareness: Bestar can advise you on any specific regulations or legal requirements that might apply to your LP, especially if your business falls under a specialized category like a Limited Partnership Fund (LPF).
Ongoing Compliance: Bestar can provide ongoing guidance on maintaining compliance with filing requirements after registration.
Additional Support:
Business Registration: We can assist with obtaining a Business Registration Certificate from the Inland Revenue Department (IRD) after successful LP registration.
General Business Advice: Bestar can offer broad professional advice relevant to your business operations and structure.
Overall, Bestar can save you time, ensure accuracy, and provide peace of mind during the LP registration process. We can also offer valuable ongoing support for your business.
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