1 Company

A company can be incorporated by registration with the Companies Registry under the Companies Ordinance. Although there are different kinds of companies, more than 99% of investors set up their business by forming a private limited company (shown as private company in the following diagram) rather than by the other forms. There may only be one or two thousand public companies, but there are more than 500,000 private limited companies in Hong Kong.
An investor may consider setting up a private limited company to conduct his business:

• if he is thinking of limiting his liability in the operation of a business;
• if he is thinking of using a corporate vehicle as a separate legal body to conduct the business;
• if he wants to obtain finance from the bank by using the movable assets of the company as security; or
• if he wants to delegate his authority to some management personnel for them to conduct the business on his behalf.

2 Types of Company

　2.1 Company Limited by Shares versus Company Limited by Guarantee

　A company limited by shares is the most common form of company for trading and doing business. A company limited by shares has a share capital which is divided into a number of shares of certain value each. Some or all of the shares are then held by investors, which are known as the

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