(2) Liability of shareholders are limited for corporations，according to Laws of Hong Kong Cap. 622，A Company must consist of 1 shareholder, 1 director and 1 company secretary. (Sole director cannot be the Company Secretary)

Note：Shareholders and directors can be non-Hong Kong residents. However, Company secretary position has to be either a Hong Kong resident or Hong Kong registered company.

Merits：

1. Perpetual operations of business.
2. Limited liability of shareholder, not involved in persona assets or properties.
3. Business VISA maybe considered at higher priority.
4. Unique company name, less easy to be copied.
5. Better impression to clients, bankers and suppliers.

De-merits：

1. Accounting and audit cost per year for at least HK$ 6,000 per year.
2. If the business is not risky, it will not make much difference as unincorporated business.
3. Heavy penalty will be levied for late filings of documents e.g. Annual Returns for CR.
4. Company cessation and deregistration takes quite a long time, at least 6 months.
   

1. Generally, Business entertainment, travelling and trip expenses are tax deductible.
2. Director salaries are tax deductible.
3. Low tax rates 16.5% on net assessable profits (No sales / service tax)
4. Double taxation can be avoided for those countries signed mutual agreement with HK.
5. Depreciation allowance and some fully deductible items are available such as computer hardware and software.