In Hong Kong, the terms “corporation” and “incorporation” relate closely to each other but refer to different aspects of a business entity. Here’s how they are defined and differ:
- Corporation: This term generally refers to a specific type of business entity that has been incorporated. A corporation is characterized by its legal distinction from its owners (shareholders), who enjoy limited liability protection. This means the owners are not personally liable for the corporation’s debts and liabilities. Corporations can include various forms such as private limited companies, public limited companies, and other types registered under the Companies Ordinance in Hong Kong.
- Incorporation: This term refers to the process of forming a corporation. Incorporation involves registering the business with the Companies Registry in Hong Kong and complying with the statutory requirements under the Companies Ordinance. The result of this process is the creation of a corporation—a legally distinct entity that can operate, enter into contracts, incur liabilities, and own assets independently of its shareholders.
Essentially, “incorporation” is the act of establishing a company as a corporation under the law, while a “corporation” is the result of that process—a legally recognized entity with its own rights and responsibilities.