There are 4 types of business entities in Hong Kong.
- The Limited Liability Company, which is the most common type of company in Hong Kong. It offers protection of personal assets from the risks incurred by the company and its debts. It is a legal entity in its own right.
- The Sole Proprietorship, which corresponds to small-scale, low-risk businesses owned by a single person. It is an easy business to set up but is not recommended for entrepreneurs because there is no protection of personal property as there is no creation of a legal entity different from the owner.
- The Partnership, this type of entity allows 2 or more people to share a single business, allowing them to share the responsibilities and raise more funds. However, each partner is also responsible for the actions of the other partners. There are several forms of partnerships, the limited partnership with limited liabilities (similar to LLC) and a sole proprietorship (similar to sole proprietorship).