Can a Branch Office Enter into Contracts
First, let`s define our terms. In general, companies have three options if they want to enter a foreign market: a representative office, a branch and a subsidiary. When a company incorporated outside Hong Kong establishes a registered office or branch in Hong Kong as an extension of the investment company, it is referred to as a “non-Hong Kong company”. The branch is created by the de facto process of its creation. Entry in the commercial register has only a declaratory meaning. The decision on the establishment of the branch shall be taken by the competent boards of directors of the registered office. The abandonment of the branch must also be communicated to the commercial register. Branches and subsidiaries offer benefits and challenges for a growing business. First of all, let`s discuss some of the advantages and disadvantages of choosing a branch: despite its internal dependence on the headquarters, it participates independently in the trade. The legal relations of branches with their customers are subject to German law.
A representative office is an office of a foreign company that is limited to charitable activities such as market research, feasibility studies and liaison work on behalf of the foreign company. A representative office has no legal personality and as such: many companies want to grow and find a new site. This raises the question of how the new branch can be legally organized in the structure of the company. Speed (pro): A branch can be set up relatively quickly – however, as already mentioned, it is not without bureaucratic obstacles. Some companies use a branch as an intermediate step to gain local knowledge and make sales before acquiring or starting a subsidiary. Whether the branch of the foreign company is registered in Sections A or B of the Commercial Register depends on the legal form with which the foreign company is comparable. According to ยงยง 13 et seq. of the German Commercial Code (HGB), a branch is a branch spatially separated from the registered office, which is established as an additional place and permanently payable from the company and must be registered in the commercial register.
A branch is not an independent legal entity separate from the head office company. It is legally and organizationally part of the company of the registered office and is subject to the law of the registered office. If the branch was established by a foreign company, its internal constitution is governed by the articles of association and the competent foreign law. While a branch and subsidiary can perform full operation, a representative office cannot collect information or maintain contact with customers, which is known as advertising and liaison work. A representative office may not conclude contracts, with the exception of the employment of staff and contracts necessary for the operation of the office (e.B rental of office space and public services). The same company may have several business premises (branches, branches). Such a branch, also known as a permanent establishment under commercial law, depends in all respects on the registered office. Invoices are also issued in the name of the registered office.
Since standardized business operations only exist in geographically different locations, branches should not have their own business name that differs from the company`s head office. Each permanent establishment must be registered with the competent trade office, it is not registered in the commercial register. It shows no independence from the company`s headquarters. As a dependent permanent establishment, only a business registration (business registration) must be submitted to district craftsmen. Registration of a branch of a German partnership In the corporate name of the branch of a German or foreign company, the name of the registered office must appear unchanged (possibly in a foreign language), including the suffix of the legal form. If the use of a company suffix is not required under the respective foreign law or if this company suffix is not common or complete in Germany, a clarifying suffix is necessary to avoid possible errors. In addition, a suffix can be added to the name of the company in the branch (for example, Frankfurt branch). The profits of the branch that are taxed in Germany are either exempt from tax in the other country or subject to tax in that country, the amount of taxes paid in Germany being deducted from the corresponding taxes in the other country. Details can be found in the double taxation avoidance agreement that Germany has concluded with the other state. Many companies prefer the option of a serviced or virtual office when arriving in Hong Kong. Serviced offices are available throughout the city and allow for short-term leases that offer tenants a range of secretarial services.
Virtual offices provide a mailing address and a receptionist who answers the phone on behalf of your company. The application to the commercial register for an independent branch of a foreign company must be submitted by the competent executors. A branch, on the other hand, is a direct extension of the parent company and can perform core activities such as sales and contracts. It is designed to generate revenue for the business and serves a specific geographic region. The trade office may require: a copy of the certificate of incorporation of the parent company; a copy of their clearance certificate (less than one month old); a copy of the articles and articles of association of the parent company; and a resolution of the board of directors of the parent company, which indicates, among other things, the decision to establish a branch. Consider the following scenario: Company X, LLC is a fast-growing American fintech company that is experiencing a sharp increase in business with banks in Germany. The company`s management decided to open an office in Frankfurt to serve existing customers and expand Company X`s European customer base. They decided to create a wholly owned German subsidiary, Deutsche Gesellschaft X, GmbH. (A GmbH is the German equivalent of a limited liability company or LLC.) Registration is made by the branch manager with the court in which the branch is to be established.
If subsidiaries, branches or permanent establishments are to be managed by foreign natural persons, they need a residence permit which gives them the right to engage in the trade provided for in accordance with the Aliens Act. It is documented by a corresponding entry in the passport. This residence permit is required if the person concerned wishes to stay in Germany for a longer period. If the activity is to be carried out while retaining the place of habitual residence abroad by occasional entry into the Federal Republic of Germany, the specific residence permit with authorisation to engage in gainful activity is not required. A branch or branch is an extension of the non-UK company and not a separate legal entity. It will be the non-British company and not the branch that will conclude the contracts. Branch accounts must be created to display the results of activities in the UK and sent to HM Revenue & Customs each year with a UK corporate income tax return. There are no special formalities for these accounts.
This requires a capital investment of HK$10 million in a legitimate asset class in Hong Kong. Applicants must also prove that they can feed themselves and their loved ones without public support. Candidates ADMITTED TO the CIES are allowed to take a job or start a business. A limited liability company is a separate legal entity from its parent company and may enter into legal contracts on its own behalf. The liability of a parent company in a limited liability company is in principle limited to its subscribed share capital. The Companies Act requires the appointment of one or more directors, at least one of whom must reside in Singapore (citizen, permanent resident or holder of an employment passport). .