Make Your Best Business Choice in Hong Kong Essay

2250 Words9 Pages
Make your best business choice in Hong Kong Abstract The choice of a business structure can determine the success or failure of your business. It is one of the most important decisions for any entrepreneur, as the choice affects many aspects of the business. As is known to all, there are three main types of vehicles under HK legal system—sole tradership, partnership and limited liability company. In this essay, I will present a comparative analysis of these three business vehicles in HK and explore why Limited Liability Company is so prevalent among investors. The terms partnership and general partnership are used interchangeably in this essay. 【Key words】Hong Kong Company Finance Limited liability 1. Comparison of three vehicles The first and most important step in starting a business is to decide on an appropriate business structure. It is important to weigh the pros and cons of each business vehicle against your business goals, in order to choose the right structure and steer away from the wrong one. 1.1 Sole tradership Sole tradership is considered the easiest and simplest form of business. As the name suggests, the business is owned and operated by a sole person and since the business is not a separate legal entity, the owner and the business are considered one. Although this is the simplest form of business it is often considered as the riskiest as there is no protection of personal assets from risks and liabilities that arise from the business. While the sole trader accrues all the profits from the business, he is equally responsible (solely and personally) for all the liabilities. This poses a tremendous financial risk and aspiring entrepreneurs are strongly discouraged from adopting this form of business. It is relatively simple and easy to register a sole tradership in Hong Kong. Advantages a. Simple to establish: Sole traderships are

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