The characteristics of a Hong Kong limited partnership
The limited partnership
is a type of company
suited for two or more business partners who want to perform the same commercial activities and agree upon dividing the degree of responsibility between them. This type of partnership
offers advantages to foreign investors in terms of ease of incorporation and raising capital and the management requirements.
The main characteristic of the Hong Kong limited partnership is that its founders can choose the degree of liability they can have: either limited or unlimited. The general partner will be fully liable for the debts and obligations of the business as for the daily management of the activities. The limited partner will only be liable according to the amount he is willing to invest in the partnership.
This business form is easy to manage and can be preferred by those who want to act as a limited partner
, unlike the general partnership
where limited liability is not an option. An important advantage is that the limited partnership
is not dissolved if one of the limited partners decides to exit the business.
Registering a limited partnership in Hong Kong
The Hong Kong limited partnership
needs to be registered at the Companies Registry
. Following the registration procedure a Certificate of Registration of a Limited Partnership
is issued and the partners can commence their commercial activities.
The Application for registration needs to be accompanied by a registration fee and an extra fee per each 1,000 HK$ contributed by the limited partners. The certificate is usually issued in five working days.
Comparison to other business forms in Hong Kong
The set-up procedure for a limited partnership in Hong Kong
is easier than for a private limited company
and it does not require a minimum share capital. However, compared to the sole proprietor, this type of partnership will require more steps for incorporation and even for dissolution. The partnership
will also have to comply with the existing requirements for taxation in Hong Kong