Under Section 9 of the Hong Kong Companies Ordinance (Cap. 622) (Ref 1), a Company Limited by Guarantee is a distinct corporate structure without share capital, where members do not subscribe for shares or receive dividends, but instead undertake to contribute a predetermined nominal amount (typically HK$ 10 or HK$ 100 per member) toward the company's debts and liabilities only in the event of winding up. It is the gold-standard legal vehicle in Hong Kong for non-governmental organizations (NGOs), charitable foundations, chambers of commerce, industry associations, alumni clubs, and schools:
- 1. Incorporation via Form NNC1G & Sliding-Scale Government Fees (Cap. 622K): Incorporated using Form NNC1G and Model Articles under Cap. 622H Schedule 3. Unlike the flat
HK$ 1,545fee for share-capital companies, the Companies Registry fee starts at justHK$ 170(for≤ 25declared members) and is capped atHK$ 1,025. - 2. Strict Governance Red Lines (Min 2 Natural Person Directors & Public Audited Accounts): Every guarantee company must appoint at least 2 natural person directors (Cap. 622 s.453(2)), is strictly prohibited from appointing corporate directors (s.456), and must file its Annual Return (Form NAR1) together with certified audited financial statements for public inspection within 9 months + 42 days after its accounting reference period ends (ss.662(3) & 664(3)).
- 3. Section 88 Tax-Exempt Charity Status ("Section 88 Licence"): Guarantee companies established exclusively for charitable purposes may apply to the Inland Revenue Department (IRD) under Section 88 of the Inland Revenue Ordinance (Cap. 112) (Ref 2) for tax exemption on profits and Business Registration fees, and may further apply under Cap. 622 s.103 to dispense with the word
"Limited"in their name.
1. Statutory Comparison: Company Limited by Guarantee (NNC1G) vs. Private Company Limited by Shares (NNC1)
Before submitting incorporation documents, founders of associations, foundations, or social enterprises must understand the 8 statutory differences between a Guarantee Company and a standard Private Company Limited by Shares:
| Statutory Dimension | Company Limited by Guarantee (Cap. 622 s.9) | Private Company Limited by Shares (Cap. 622 s.8 & s.11) |
|---|---|---|
| 1. Statutory Incorporation Form | Form NNC1G (Incorporation Form — Company Not Limited by Shares) | Form NNC1 (Incorporation Form — Company Limited by Shares) |
| 2. Share Capital & Profit Distribution | No share capital. Typically prohibits dividend distribution to members; surplus is reinvested in company objects. | Has share capital (standard HK$ 10,000); distributes profits to shareholders via dividends. |
| 3. Member Liability Limit | Limited to the guarantee amount promised in the Articles (e.g., HK$ 100) upon winding up. | Limited to any unpaid amount on the shares subscribed by the shareholder. |
| 4. Minimum Number of Directors | Minimum 2 directors (Cap. 622 s.453(2)). | Minimum 1 director (Cap. 622 s.454(1)). |
| 5. Corporate Directors Allowed? | Strictly Prohibited (0 allowed) under Cap. 622 s.456(1)(b) — all directors must be natural persons. | Allowed, provided at least one director is a natural person (s.457). |
| 6. Statutory Model Articles | Cap. 622H Schedule 3 (39 articles tailored for non-share members and governance). | Cap. 622H Schedule 2 (84 articles or Sole Director Model Articles). |
| 7. CR Registration Fee (Cap. 622K) | Sliding Scale by Member Count: • ≤ 25 members: HK$ 170• 26 – 100 members: HK$ 340• Per +50 members over 100: +HK$ 20 (Max cap: HK$ 1,025) | Flat fee: HK$ 1,545 (Electronic) or HK$ 1,720 (Paper). |
| 8. Annual Return (Form NAR1) & Public Accounts | File within 42 days after 9 months from financial year-end (s.662(3)); must attach certified Audited Financial Statements for public inspection (s.664(3)). | File within 42 days after incorporation anniversary (s.662(1)); financial statements are exempt from public filing. |
2. Step-by-Step Procedure to Incorporate a Guarantee Company (Form NNC1G) & Fee Schedule
- Step 1 — Name Pre-Clearance & Restricted Words Check (Cap. 622A): Many guarantee companies wish to include words such as
"Association (協會)","Foundation (基金會)","Society (學會)", or"Institute (研究院)". While general words like "Association" or "Foundation" are permitted, words such as"Chamber of Commerce (總商會 / 商會)","Kaifong (街坊)", or"Trust (信託)"require prior written consent under Cap. 622A (see HK Company Naming Rules). - Step 2 — Draft Articles of Association (Cap. 622H Schedule 3 or Section 88 Charity Articles): If the company does not intend to apply for tax-exempt charity status (e.g., an industry trade club or property owners' association), it may adopt Cap. 622H Schedule 3 Model Articles. However, if you plan to apply for IRD Section 88 Charity Status, you must draft custom bespoke Articles containing the IRD's mandatory charitable objects, non-distribution clauses, and director non-remuneration clauses right from day one.
- Step 3 — Complete Form NNC1G & Declare Number of Members: In Form NNC1G, declare the maximum number of members with which the company proposes to be registered (most NGOs declare
25or fewer initial members to qualify for the lowestHK$ 170CR registration tariff), the guarantee amount per member (e.g.,HK$ 100), at least 2 natural person directors, a HK-resident Company Secretary, and a HK registered office address. - Step 4 — Pay Statutory Fees & Obtain CI + BRC: Upon submission of Form NNC1G, Articles of Association, and Notice to Business Registration Office (IRBR1), pay the CR registration fee (
HK$ 170for≤ 25members) plus the initial 1-year Business Registration fee (HK$ 2,350, unless already holding IRD Section 88 prior exemption). If expand membership later, file Form NM3 (Notice of Increase in Number of Members) within 15 days.
3. How to Apply for IRD Section 88 Tax-Exempt Charity Status ("Section 88 Licence")
Incorporating a Company Limited by Guarantee does not automatically make the entity a tax-exempt charity. To enjoy Profits Tax exemption, Business Registration fee exemption (Cap. 310 s.16(1)(a)), and allow donors to claim tax-deductible receipts (for donations of HK$ 100 or more), the company must submit a formal application to the Charities Section of the Inland Revenue Department under Section 88 of the Inland Revenue Ordinance (Cap. 112) (Ref 2):
- 1. Strictly Charitable Objects (4 Common Law Heads): The company's objects clause must be exclusively charitable under Hong Kong common law: (a) relief of poverty; (b) advancement of education; (c) advancement of religion; or (d) other purposes of a charitable nature beneficial to the Hong Kong community (e.g., environmental protection, public healthcare, animal welfare).
- 2. Five Mandatory Clauses Required in Articles of Association:
- Income & Property Clause: All income and property must be applied solely toward promoting the stated charitable objects, with strict prohibition against paying dividends, bonuses, or profit distributions to members;
- Prohibition on Director Remuneration: Members of the board of directors (or executive committee) must not receive any salary, remuneration, or benefit in money or money's worth from the charity;
- Dissolution / Winding-Up Asset Lock Clause: Upon winding up or dissolution, any remaining net assets may not be distributed among members, but must be given or transferred to another charitable institution with similar objects;
- Proper Books of Account & Audit Clause: Mandatory keeping of donation receipts, accounting records, and annual statutory audit by a Hong Kong Practising CPA;
- Alteration of Articles Notification Clause: No addition, alteration, or amendment may be made to the Objects or mandatory charity clauses without prior written approval from the IRD.
- 3. Review Timeline & Required Dossier: The IRD Charities Section requires a 12-month operational plan, budget forecast, founders' CVs, and draft Articles. Review typically takes 4 to 9 months.
4. Dispensing with the Word "Limited / 有限公司" (Cap. 622 s.103 Licence)
By default, even a non-profit Company Limited by Guarantee must end its English name with "Limited" and its Chinese name with "有限公司" (Cap. 622 s.102). However, many prestigious chambers of commerce, religious bodies, and charities prefer a name such as "ABC Charitable Foundation" without the word "Limited". Under Section 103 of the Companies Ordinance (Cap. 622) (Ref 3), the Registrar of Companies may grant a Licence to Dispense with the Word "Limited" if:
- The company is already recognized (or concurrently approved) as a tax-exempt charity under Section 88 of the Inland Revenue Ordinance;
- Its Articles require all profits to be applied to promoting its objects and strictly prohibit dividend payments to members; and
- The company maintains sufficient financial resources to fulfill its stated objects.
Frequently Asked Questions (FAQ)
A Private Company Limited by Shares (Form NNC1) has share capital, can have a single natural person director, distributes profits to shareholders as dividends, and is exempt from filing its audited financial statements publicly with the Companies Registry. A Company Limited by Guarantee (Form NNC1G) has no share capital, requires at least two natural person directors (corporate directors are prohibited under Cap. 622 s.456), limits each member's liability to a nominal guarantee amount upon winding up, and must file its certified audited financial statements with every Annual Return (Form NAR1) for public inspection.
Under the Companies (Fees) Regulation (Cap. 622K), the Companies Registry incorporation fee for a Company Limited by Guarantee depends on the number of members declared in Form NNC1G: HK$ 170 for 25 or fewer members; HK$ 340 for 26 to 100 members; plus HK$ 20 for every additional 50 members (capped at HK$ 1,025). Unless the entity has already obtained Section 88 charitable tax exemption from the IRD, it must also pay the standard HK$ 2,350 1-year Business Registration fee and levy upon incorporation.
No. Incorporating a Company Limited by Guarantee at the Companies Registry only creates the legal entity. To become a recognized tax-exempt charity ("Section 88 Charity") able to issue tax-deductible donation receipts and enjoy Profits Tax and Business Registration fee exemptions, the organization must submit a separate application to the Inland Revenue Department (IRD) under Section 88 of the Inland Revenue Ordinance (Cap. 112), which takes approximately 4 to 9 months to review.
By default, every Guarantee Company must end its name with "Limited" (and "有限公司"). However, once the company obtains (or concurrently applies for) Section 88 charitable status, it may apply to the Registrar of Companies under Section 103 of the Companies Ordinance (Cap. 622) for a Licence to dispense with the word "Limited" in its name.
- [Master Guide] How to Register & Set Up a Company in Hong Kong: 2026 Fees (HK$ 3,895), SOP & Banking
- HK Company Naming Rules, Name Search & Restricted Words Guide (Cap. 622 ss. 100–111 & Cap. 622A)
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- HK Articles of Association (Cap. 622H Model Articles) Guide: Sole-Director Clauses & JV Governance
- HK Company Re-Domiciliation Regime Guide: Migrate BVI & Cayman Entities to Hong Kong Without Winding Up
5. Official Statutory References & Citations
- Companies Ordinance (Cap. 622), Sections 9, 103, 453(2), 456, 662(3) & 664(3) + Cap. 622H Schedule 3: Statutory framework for Companies Limited by Guarantee, prohibition on corporate directors, public filing of audited financial statements, and Model Articles.Hong Kong e-Legislation (Cap. 622).
- Inland Revenue Department (IRD) — Tax Guide for Charitable Institutions and Trusts of a Public Character (Section 88 of Cap. 112): Mandatory governing instrument clauses, application procedures, and tax exemptions for recognized Hong Kong charities.IRD Official Section 88 Charity Tax Guide.
- Companies Registry — Guideline on Applications for a Licence under Section 103 of the Companies Ordinance (Dispensing with "Limited"): Criteria and procedures for omitting "Limited / 有限公司" from a charitable guarantee company's name.Hong Kong Companies Registry.