Features of Corporations
- Separate legal entity (the right to sue and be sued in its own name)
- Unlimited life
- Investor ownership
- Limited liability of the shareholders
- Delegated management
- Transferable shares
Tax Implications of Corporations
- Double taxation
- First, a corporation’s profits is subject to corporate income tax (business profits tax)
- Then, the dividend received by the shareholder is subject to personal income tax (not applicable in HK)
- Note: Dividend income or capital gains is not subject to personal income tax in HK.
Corporation Structure
