Thu, Mar 19th 2015, 13:36
Capital is the first and foremost requirement for establishing a business. The initial investment plays a crucial role in the formation of the business.
Capital is the first and foremost requirement for establishing a business. The initial investment plays a crucial role in the formation of the business. Capital decides the size of the investment that the business is going to make, the number of markets, it is going to cover, and the amount of commodities it is about to produce. Any entrepreneur who is going to set up company in Hong Kong will need a specific amount of registered capital. This is the amount that the businessman is going to invest to initiate the operations in the country.
What is a registered capital?
Registered capital simply represents the maximum financial capacity of a company. A company gains its finance by issuing shares, debentures, bonds, and various other instruments. By issuing new shares to its existing customers, it can easily acquire a sound working capital. In other terms, the registered capital is the shareholder’s maximum liability. This means, if the company liquidates at any point of time, this is the amount it will hold in total. The greater the registered capital of the company, the more it is believed to be financed. One important point about registered capital is, no matter how bigger the sum is it does not need any verification.
The minimum registered capital for a company set up in Hong Kong
If you are setting up business in Hong Kong, you need to have a standard capital of HKD 10, 000. Although the amount is very less, a businessperson must ensure that the registered capital is as high as it can be. A higher capital is seen as a safe investment opportunity for the investors. People will be more confident in investing their worth in those companies that look promising from all the angles. Having a higher registered capital creates an impression that even if the company faces losses at any point of time, it will have enough capital left to recover.
A registered capital is however different from the issue of shares. The capital is first registered with the government before it moves with any of its operations. The issue of shares is made only after the capital is registered and shouldn’t be more than that of the registered capital. Shareholders should have an ownership on the basis of issue of shares and any future financial obligation will also be calculated on the basis of the shares issued. In short, the capital is indirectly controlled by the amount of shares and the shareholders associated.
If you are looking for investors in Hong Kong who will be interested in your company, you can take the help of the business consultancies. These are groups that make your business incorporation easy and simple. They can also fetch you investors who will be interested in your venture and willing to invest in it. It all depends on the kind of resources you are depending upon. Find the right consultancies and you will see your business growing on a daily basis.
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