- Q:
- Does the authorized capital of the company need verification?
- A:
- The authorized capital, no matter how much it is, does not need verification.
- Q:
- What is the difference and relation between authorized capital and issue of shares?
- A:
- Authorized capital shall be registered with Government first. Issue of shares shall be made after capital is registered, so issuance of shares shall not exceed the authorized capital. Shareholders shall fully pay the issued shares on proportion of shareholding instead of authorized capital. The future obligation to be incurred by the company shall be calculated on the basis of issue d shares.
- Q:
- What does the authorized capital represent?
- A:
- The authorized capital represents:
- The company's maximum financing capacity: The company finances its existing shareholders or new investors through issue of new shares, so the higher the authorized capital, the more the company can finance
- Shareholders' maximum liability: If the company liquidates, shareholders shall bear liability limited to the issued but not fully paid capital instead of authorized capital.
- Q:
- How much authorized capital will be needed in company formation?
- A:
- The authorized capital represents the company's financing capacity, and additionally, the authorized capital can also be deemed as shareholders' undertaking to future obligations to be incurred by the company, so the higher the authorized capital, the higher the confidence the public will have on the company. Hong Kong company of limited liability shall have a standard authorized capital of HKD10,000.
- Q:
- What governmental fees need to be paid for increasing authorized capital?
- A:
- Hong Kong Government shall charge 0.1% Stamp Duty, that is, for every increase of HKD1,000 authorized capital will charge HKD1.00. No matter how much authorized capital is increased, Hong Kong Government shall charge Stamp Duty up to HKD30,000 at each time.
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