What is a private limited company under the laws of Hong Kong?

The Hong Kong Companies Ordinance states that a private limited company is a company, whose articles of association fulfills the following functions:

• Restricting the right of shareholders to transfer shares;
• Limiting the number of shareholders to 50 (however, shareholders should not mean employees and former employees who became shareholders while they are employed by the company); and
• Prohibiting the company to allow public to subscribe its shares or debentures.

Apart from the articles of association, the memorandum of the private limited company should state that the liability of its shareholders should be limited to:

• The amount of unpaid company shares that such shareholder holds; or
• The amount that such shareholder promises to contribute in the event of the company’s bankruptcy.