In Hong Kong, many company names end with the word “Limited”. This is not by accident, but is in accordance with the Hong Kong Companies Ordinance (Cap. 622). The Ordinance requires all limited companies registered in Hong Kong to add the word “Limited” or its abbreviated form “Ltd.” to their names to clearly identify them as such. This article will explore why this is the case and whether there are any companies that are exceptions.
“Meaning of “Ltd.
“Limited” is the English word for “limited” and “Ltd.” is the abbreviation of “Limited”, which is often used at the end of a company’s name to indicate that the shareholders of the company have limited liability to the company and it is a kind of “Limited Company”. In other words, if the company goes bankrupt, the shareholders are only liable for losses up to the amount they have invested in the company. In this form of business, the shareholders of a company have only a limited liability for the liabilities of the company.
From an accounting point of view, this requirement has important implications for the financial reporting of a company. Firstly, limited companies are required to conduct regular financial reporting and submit it to the Companies Registry in accordance with the CO. This helps to ensure that the company’s financial position is transparent to external stakeholders and enables them to have a clear understanding of the company’s operation.
Does a limited company have to end with “Limited”?
Under the Companies Ordinance, the registered name of a limited company must be in a specific format.
If a limited company has an English name only, the last character of its name must be “Limited”;
For a limited company with a Chinese name only, the last four characters of its name must be “有限公司”;
For a limited company with both a Chinese name and an English name, the last character of its English name must be “Limited” and the last four characters of its Chinese name must be “有限公司”.
Obviously, the name of a limited company, whether in Chinese or English, must clearly identify it as a limited company. Except in the following cases…
Can “Limited” be omitted from the “Registrar’s License”?
If there is evidence that an organization meets certain conditions, the Registrar may grant a charter to allow the organization to omit the word “Limited” or “Limited Company” and thereby register its name as a limited company. These conditions include:
The organization is formed for the purpose of advancing a commercial, artistic, scientific, religious, charitable or other useful object;
The organization plans to use its profits or other income to further its objectives;
the organization plans to prohibit the payment of dividends to its members.
These terms and conditions are binding on the company concerned and, if the Registrar considers it necessary to include them in the company’s articles of association, he must do so.
It is worth mentioning that a company which has obtained the registration of a charter still enjoys the rights of a limited company and is subject to the liabilities of a limited company subject to compliance with the relevant requirements. The above information is for reference only. If you have any questions or information regarding tax returns (personal tax return, corporate tax return, accountant tax return), we welcome you to contact our professional advisors and will provide you with a free quote and consultation service later.