A Hong Kong company limited by guarantee is a company without share capital. It has members rather than shareholders, and each member undertakes to contribute a stated amount if the company is wound up.
The structure is commonly used by charities, professional associations, clubs, educational bodies and other non-profit organizations that need a separate legal entity without equity ownership.
The main caution is that incorporation does not automatically create charitable status or section 88 tax exemption. Founders must separately plan the Articles of Association, governance, annual audit and filing obligations, and any Inland Revenue Department application for charitable tax-exempt recognition.
Section 9 of the Companies Ordinance, Cap. 622, defines a company limited by guarantee as a company without share capital whose members’ liability is limited by the amount they undertake in the Articles to contribute if the company is wound up.
Unlike a private company limited by shares, it has members and a guarantee amount rather than shareholders and share capital.
The Companies Registry states that non-profit-making organisations are usually registered as guarantee companies. The company form itself, however, does not automatically prove that the organisation is a charity.
Typical users include:
At least one member is required under the source structure used for incorporation planning. Members may be individuals or corporate entities.
They do not receive shares. Their rights and voting rules should be set out in the Articles.
A company limited by guarantee must have at least two directors.
Its directors must be natural persons. A body corporate cannot act as a director.
The Companies Ordinance does not require directors to be Hong Kong residents.
A company secretary is mandatory.
An individual secretary must ordinarily reside in Hong Kong. A corporate secretary must have its registered or principal office in Hong Kong.
The company must maintain a registered office in Hong Kong.
Form NNC1G states that non-Hong Kong addresses, “care of” addresses and post-office boxes are not acceptable.
The Articles are the operating constitution of the organisation.
They should address:
For an organisation seeking section 88 charitable recognition, the objects should be exclusively charitable and for public benefit.
Decide whether the organisation will operate as a charity, professional body, membership association, educational organisation or other non-share entity.
If section 88 may be required later, design the charitable objects before incorporation.
The proposed name should not be identical to an existing name in the Companies Registry index.
A normal company name ends with “Limited” or “有限公司”.
An eligible association can separately apply under section 103 for a licence to omit that ending.
Form NNC1G is used to incorporate a company not limited by shares.
It records core company, member, guarantee, director and secretary details.
The current Companies Registry process requires:
Filing can be electronic or in hard copy.
After incorporation, establish banking, accounting, governance and document-retention procedures.
Not automatically.
Section 103 allows an eligible association to apply for a licence to dispense with “Limited” or “有限公司”.
The Companies Registry guidance states that the association should be formed to promote commerce, art, science, religion, charity or another useful object.
It must apply its profits or other income to promoting its objects and prohibit dividends to members.
A guarantee company files Form NAR1 for every financial year.
For a modern guarantee company, the annual return must generally be delivered within 42 days after the company’s return date.
The return date is nine months after the end of the accounting reference period.
Certified true copies of the company’s financial statements are delivered with the annual return.
The filing package also includes the directors’ report and auditor’s report.
Annual accounting and audit planning is therefore essential.
Late delivery can lead to higher registration fees and prosecution risk. The Registrar has no power to extend the statutory filing deadline.
No.
The Inland Revenue Department states that a charity is not equivalent to every voluntary or non-profit-making organisation.
To obtain recognition under section 88 of the Inland Revenue Ordinance, an organisation must be established exclusively for charitable purposes and for public benefit.
The four traditional heads are:
IRD publishes Form C.D.22 for section 88 applications. It states that, when all relevant information is supplied and no further information is required, it endeavours to respond within four months.
Potentially, but exemption is not unlimited.
IRD states that profits from a charity’s trade or business are exempt only if the statutory conditions are met.
Among other requirements, the profits must be applied solely for charitable purposes, must not be expended substantially outside Hong Kong, and the trade or business must satisfy the conditions in the section 88 proviso.
Commercial activities should therefore be reviewed separately.
Q1. Can a foreigner be a director?
Yes. Directors do not need to be Hong Kong residents, but a guarantee company needs at least two natural-person directors.
Q2. Can a company limited by guarantee have shareholders?
No. It has no share capital. It has members whose liability is limited by their guarantee.
Q3. Can a corporate entity be a member?
Yes, subject to the Articles and incorporation arrangements.
Q4. Does the company need an audit every year?
A guarantee company delivers certified financial statements, the directors’ report and auditor’s report with its annual return.
Q5. Does incorporation give section 88 tax exemption?
No. Section 88 recognition is a separate IRD process.
Q6. Can the company omit “Limited” from its name?
Only if the Registrar grants a licence under section 103 and the conditions are met.
Q7. Can a section 88 charity earn trading income?
Yes, but profits are exempt only when the section 88 conditions are satisfied.
Tannet may assist organisations with Hong Kong guarantee-company incorporation, Articles and governance coordination, company secretary and registered office, business registration, bank-account preparation, bookkeeping, audit coordination, annual returns, corporate changes and deregistration.
For organisations seeking charitable recognition, Tannet may also coordinate section 88 application preparation and related compliance work. Charitable status, tax exemption and any section 103 licence remain subject to the relevant authorities.
Contact Information
Consult:
📍 HK Office：Unit B, 26/F, EGL Tower, 83 Hung To Road, Kwun Tong, Kln., Hong Kong
📞 Tel：852 2782 6888 / 852 2783 7818
📞 WhatsApp：852 9600 9360 / 852 9209 4361
💬 WeChat：Tannetgrouphk / t92094361
📧 Email：gary.tannet@gmail.com / ata.phoebe@gmail.com
🌐 Website：www.tannet-group.com / www.tannethk.com
You are also welcome to visit our service outlets in Beijing, Shanghai, Guangzhou, Shenzhen, and other cities at any time.
————————————————Simplifying Business, Empowering Entrepreneurs————————————————