A Company Limited by Guarantee

Limited company and Unlimited company may be set up in Hong Kong under chapter 622 of Company Ordinance. A company is an unlimited company if there is no limit on the liability of its members, otherwise it is a limited company, and the liability of the members may be limited either by shares or by guarantee. Here we’ll introduce a company limited by guarantee.

A company limited by guarantee does not have a share capital and is an independent legal entity. It can own assets, receive loans, sign contracts and involve legal proceedings under its own name. a company limited by guarantee can exist perpetually no matter how its members and directors vary. The members of the company undertake, by company’s articles, to contribute to the assets of the company in the event of its being wound up. The profits of the company can not be distributed to the members, however, directors, officials and employees of the company can be reimbursed in proper to their positions and liabilities. 


A company limited by guarantee is widely taken as a vehicle by non-profit organizations and clubs, charity groups and foundations. Under section 88 of Tax Ordinance of Hong Kong, where the objects of a charity organization is:
• The relief of poverty, or
• The advancement of education, or
• The advancement of religion, or
• Other purposes of a charitable nature beneficial to the community not falling under any of the preceding heads.

It is entitled to seek for exemption for profits tax from Inland Revenue Department. Furthermore, it may file application with the Company Registry for removing the “limited” from its company name thus make it charity purpose more distinguished. 

Structure of a Company Limited by Guarantee

Directors are in charge of the company operation, however, members of the company may instruct the directors to take or not take some specified activities through special resolutions.

A company limited by guarantee shall have at least one member, two individual directors, one company secretary and one appointed representative. Both Individual and legal entity can be members of a company and no restriction on their nationality and domicile.  Directors of company shall be natural persons and at least  2 directors are requisite, no restriction on directors’ nationality and domicile as well. A company secretary is necessary and both natural person and legal entity which owns either Hong Kong residency or registered with Hong Kong Company Registry  can act as company secretary. Appointed Representative is a liaison between the company and Hong Kong Company Registry regarding company affairs thus it should be a Hong Kong resident. 

Annual Maintenance of a Company Limited by Guarantee

Under Company Ordinance, a company limited by guarantee shall be liable to the following obligations:
• Keep records of members, directors and company resolutions,
• Report relevant changes to Company Registry,
• Keep books and records,
• File financial statements, director statements and audit report on a yearly base,
• File Annual Return,
• Convene annual general meeting.