Establishment of a Hong Kong Limited Company – Company Limited by Guarantee (Non-profit Organization / Institution)
Generally speaking, a company limited by guarantee is established to promote or advance a specified purpose, such as a chamber of commerce, a society, an educational or religious institution, or a charitable organization. An organization established in this form does not operate for profit, but even for the promotion of charity. Approved charities must be established purely for charitable purposes.
If the purpose of the establishment of a group or organization meets the following requirements, we can assist in applying for "recognized charitable organization"
· Poverty relief
· Promote education
· Promote religion
· Other purposes other than those mentioned above that are beneficial to society and of a charitable nature
Charities can enjoy the following benefits:
· Charitable institutions or trusts of a public character are exempt from tax levied under the Inland Revenue Ordinance.
· A charitable institution or trust of a public character carrying on any trade or business is exempt from paying profits tax if the profits from such trade or business meet the following conditions:
the profits are applied solely to charitable purposes and the major part of the profits is not spent outside Hong Kong and (a) the trade or business is carried on in substantial pursuit of the express objects of the institution or trust (for example, a religious body may sell religious pamphlets and leaflets); or (b) the work connected with the trade or business is mainly done by persons for the benefit of whom the institution or trust is established (for example, a society for the protection of the blind may arrange for the sale of handicrafts made by blind persons).
Charitable, religious or educational institutions of a public character are generally exempt from business registration.
Once we receive your application, our experts will work with you to design the company structure and mission statement. We will draft the company constitution according to your needs. Once the company constitution is confirmed, it usually takes 1.5 months to register the company. If the organization wants to apply to be a "recognized charity", it will take another 9-12 months.
We can also assist Recognized Charities to apply for exemption from the Limited Company designation.