Starting a business can be a complicated process with several documents and processes that need to be prepared.
Many people think that the business registration number and company numbers are one and the same. This is not true. The company number has many different meanings depending on which country you live in, but it is typically used as a tax ID or identification code for an organization such as a corporation or charity. In Hong Kong, both numbers are required when registering your business with the government.
Let’s take a look at what they both mean as it would help you understand if they mean the same thing.
What’s Business Registration Number In Hong Kong?
A business registration number is a unique number assigned to you as a business owner by the Inland Revenue Department. As a matter of fact, every business operating in Hong Kong requires a Hong Kong business registration number. The purpose of this number is to be used as an identifier for all your commercial documents such as tax returns, enrollment with trade organizations, and other administrative documentation. It is different from the company number but they can be used interchangeably (if it makes reporting and paperwork easier).
The business registration number is an 8-digit sequence at the front of your BR certificate number. You need to input this number when you are filing your company tax returns.
What Is the Company Number?
The company number is also referred to as the corporate entity identification code or CEIC, and it’s used by other countries that use a 9-digit format (including HK). The company number — like the business registration number — identifies you as an organization for various administrative purposes. It is especially important because the company number appears on all documents related to your incorporation. This includes filings, annual reports, share certificates, and minutes of shareholders’ meetings.
While there are similar numbers that mean different things in various countries, typically the company number represents your organization for taxation purposes. This type of tax ID analyzes how much money your company makes and what kinds of expenses you take out before distributing profits back to shareholders or employees after taxes have been taken out.
Why Do You Need The Company Number?
In general, you need the company number for commerce purposes. This is because it creates a standard format that is recognized by business organizations and corporations around the world to avoid confusion of legal records. You need a different company number depending on where you’re doing business, which is why there are different numbers in each country.
There are other several purposes a company number serves- you need it when applying for a checking account or credit card, for example – but it mostly has to do with taxes. If you are not paying monies owed to the IRS directly, then the agency uses your identification code to make sure they are getting their money from somewhere. You can’t escape – especially if your corporation starts accumulating huge amounts of debt!
Hong Kong’s CA Registry however uses both your BRN and Company Number interchangeably when filing documents with its office. A BRN can be used on its own if there have been no changes to the registered information over time, but you will still need both numbers if there have been updates on your company profile i.e. address change or new shareholders involved in the business operations after starting up.
Why Do You Need a Business Registration Number?
Having a business registration number makes it easier for the government to track your financial records and file any taxes that are due. It is much easier to track companies by using this number because you need to have one in order to legally register with the government as an official company, which puts you on their radar.
What Are The Advantages and Disadvantages of Company Number?
The main advantage is that having a company identification number gives you access to a wide variety of opportunities in the business world. Having a separate number for your corporation makes it easier for banks, suppliers, or anyone else who enters into a financial or commercial relationship with your business to know where your company stands in terms of taxation and payment records.
This could be beneficial if you’ve experienced poor performance before, as creditors may simply look at your company number and turn down any cash advances. At this point, there are no disadvantages because it’s just how countries such as Hong Kong get their taxes done efficiently. It can get confusing thinking about all these different numbers but there isn’t really any harm in it.
That about sums up what you need to know about the business registration number and company number. Would you need them for your business? Most definitely! But, don’t let them confuse you. Reach out to experts who can make the registration process of your business easy.