Changing a Sole Proprietorship into a LLC in Hong KongA presentation brought to you by ourLawFirmHongKong.com

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Expanding Existing Hong Kong Businesses

• Existing businesses in Hong Kong can be converted into other legal entities.

• This is a process followed by investors who want to expand their business or change the extent of the liability they have within the current legal structure.

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Why Change your Business Form in Hong Kong?

• Some of the reasons why businessmen choose to change their business form in Hong Kong into another type of legal entity are:

decrease business risks; limit liability; expand the business; upgrading the business image.

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The Sole Proprietorship in Hong Kong

• The sole proprietorship is a common business form used by an investor who wants to start his own business.

• This is the simplest business form, it has low incorporation and maintenance costs and it is not subject to the corporate income tax. The owner is fully liable for the debts and obligations.

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The LLC in Hong Kong

• The limited liability company (LLC) is the most popular type of company in Hong Kong. This is a separate legal entity from the founder, unlike the sole proprietorship.

• The liability of the company members is limited only to the extent of their contributions. The company can sign contracts in its own name and it is better perceived by the public.

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When to Convert a Hong Kong Sole Proprietorship

• An investor in Hong Kong can start considering transforming the sole proprietorship into a limited liability company when the small business has reached its maximum potential and the investor wants to expand the scope of the business.

• The company conversion process is simple and can have a positive impact on the business.

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Benefits of Converting a Sole Proprietorship into a LLC

• The most important benefits of converting a sole proprietorship in Hong Kong are the following:

limited liability: the investor is no longer fully liable within the LLC in Hong Kong;

distinction between company assets and personal assets;

better public perception: the company will be able to have more credibility to the public;

continuity: the company will survive its founders.

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The Company Conversion Procedure in Hong Kong

• In order to convert a sole proprietorship in Hong Kong, the investor will have to open a new company and register it with the Companies Registry.

• The assets of the sole proprietorship will be transferred to the company and any business contracts will be re-signed. The new company will need licenses and permits.

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Why Invest in Hong Kong?

• Hong Kong is a city that attracts a large number of foreign direct investments.

• Small and large companies can be incorporated here and the investors enjoy an international business climate and low taxation regime.

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Assistance for Company Formation in Hong Kong

• Investors have the option of soliciting professional assistance during the company conversion process.

• The experts at our law firm in Hong Kong can help you choose the most suitable business form for your needs and change your business structure.

Thank You for Your Attention!

• For more information please contact us at:

 + 852 8191 3385 (for international clients)

office@lawfirmhongkong.com

http://www.lawfirmhongkong.com/

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