What does shelf / ready-made company mean?
In Hong Kong, some of the incorporation intermediaries pre-registered a large quantity of limited company at Companies Registry (CR) but has never traded its record is completely clean. Those pre-registered Hong Kong companies are readily made by these intermediaries for reselling to others as if a piece of off-the-shelf hardware.
Upon purchasing by others, the ownership of an off-the-shelf limited company will be transferred to new owners by filing amendment of director(s) and shareholder(s) to CR (change of company name, registered office address and company secretary are optional). Once the changes are filed in CR, the company is ready to use under the ownership of new owners.
- Speed: Skipping the lead time of CR in formation of a new Hong Kong limited company, buying a ready-made Hong Kong limited company can be done within 2 to 3 days since the process involves amendment of records only.
- Age: When a freshly incorporated is not enough to make your customers and supplier feel confidence, buying an aged shelf-company is the feasible option.
- Cost: Price tag of a shelf company is definitely higher than the service package of new company incorporation because the intermediaries have to charge buyers for the cost of upkeep – the cost of annual renewals and maintenance before a ready-made company is sold.
- Annual renewal date: Most likely, the anniversary date of incorporation of a shelf company is earlier than the date of purchase, so the new owner of the company should expect the due date of renewal is less than 1-year after the purchase.
What is the requirement of owning a shelf company?
The obligation of a shelf Hong Kong company is completely the same as the Hong Kong company which is incorporated.
Here is the list of minimum requirement of owning any Hong Kong private limited company:
The company name, which can be in English or Chinese only or both, can not be the same or too similar as one already registered with Companies Registry (CR) in Hong Kong.
As the name “ready-made” suggests, the company you purchase from the incorporation intermediary is already registered with a name created.
Company name change is available after incorporation.
Each company incorporated in Hong Kong must have at least one shareholder, one director and a company secretary. These position can either a natural person or body corporate regardless of their nationality/place of incorporation. For natural person directors and shareholders, they must be at least 18 years old.
A person can act in dual capacity, i.e. one can act as shareholder, director and secretary at the same time.
However, if a person is a sole director, this person could not act as director and company secretary at the same time, and at least on the the director(s) must be a natural person.
As a result, shelf Hong Kong companies can be sold to and owned by any adult. Copies of identity card or passport of all shareholder(s) and director(s) are required to be recorded in CR.
Company Secretary must be a Hong Kong resident or a company incorporated or having a business address in Hong Kong.
For buyer of a shelf Hong Kong companies, your incorporation intermediary has acted this position before your purchase.
Registered Office Address:
Each company must have one Hong Kong address to be used as Registered Office for communication with the Hong Kong Government. Post box address is not accepted.
The incorporation intermediary usually use their office address in the registration of the shelf Hong Kong companies.
Change of registered office address is available after incorporation.
This could be the most complicated matter related to incorporation and ongoing maintenance of any private company in any jurisdiction.
In Hong Kong, there is no restriction on the amount of share capital and the share capital can be expressed in any currency other than HKD. Most of the companies are incorporated with a standard capital of HKD10,000 divided into 10,000 shares of HK$1.00 each unless otherwise advised.
For simplicity, all shelf or ready-made Hong Kong companies come with a capital of HK$10,000 divided into 10,000 shares of HK$1.00 each.
Increasing the share capital is available after incorporation.
Required by Hong Kong laws, a company once incorporated must apply for the Business Registration Certificate for doing business on submission of company incorporation application.
On the purchase of ready-made company, the application of change of company name and address will be handled the same time.
What is the ongoing requirement of maintaining a shelf company in Hong Kong?
It has no difference to that of a limited company incorporated from the ground. For details, please refer to the following: