AbacusHKCPA - Company Formation and Company Registration by Hong Kong Accountants (HKCPA)

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Hong Kong Company - Private Limited Company


Company Registration Procedure

What is the difference between authorized share capital and issued share capital?

Authorized Share Capital
Authorized share capital is the maximum amount of shares that a company is allowed to issue.

For example, the ready made company that we are selling comes with HKD 10,000 authorized share capital splitting into 10,000 shares.
This is the maximum amount of shares that we can sell. However, this does not mean that we can only raise HKD 10,000 as share capital.

Some people may pay you a premium to buy a share. This depends on how well the new shareholder is valuing your company.
Even though he is paying HKD 1,000 for a share of your company, HKD 999 of it is premium. he is buying only 1 share and entitle to 1 voting right only.

Issued Share Capital
Existing shareholders are free to pick new investors. They can "issue" ( or "allot") shares to new investors.

The shares can be issued at par or at premium. Only issued share capital is considered paid up capital.

Stamp duty is levied in increasing authorized share capital, but not in issuing (allotting) shares.
When old shares (shares already issued) are changing hand, stamp duty also need to paid.
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