Typically, a company limited by guarantee is established to promote education, religion, poverty relief, trusts, and foundations. Although most organizations structured in this way are not intended for profit, they cannot automatically be considered charitable. For an organization to qualify as a charity, its purposes must be exclusively charitable as defined by law.
We can assist institutions that align with the following charitable purposes in applying for approved charitable institute (ACI) status:
- Poverty relief
- Advancement of education
- Advancement of religion
- Other charitable purposes beneficial to the community not covered by the previous categories
Being an ACI comes with several advantages, such as:
- Tax exemption is granted
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Tax exemption is granted, specifically on profits if:
- The profits are solely used for charitable purposes; and
- The profits are not significantly spent outside Hong Kong, and if either
- The exemption applies to trade or business conducted during the actual execution of the institution or trust's stated objectives (e.g., a religious organization selling religious tracts).
- The exemption applies if the work related to the trade or business is primarily conducted by individuals for whose benefit the institution or trust is established (e.g., a society for the protection of the blind arranging for the sale of handicraft work made by the blind).
- The institution is not required to register as a business unless it carries out a trade or business.
If requested, we can provide you with an application form to fill in the details of your institution, including objectives, membership information, directors, and company secretary.
Registering a "company limited by guarantee" involves following the standard procedures for registering a "company limited by shares," which is the most common type of business entity in Hong Kong.
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