Is your Hong Kong company in a situation where it hasn’t generated any business or revenue for quite a while and you at present wish to deregister it? Given that your business is currently no more and that it does not have any debts or liabilities whatsoever, you can also deregister your company.
The closing of business in Hong Kong is a process that involves some specific steps, which take about a few months to complete. The expense of the company closure depends on how the company is being closed which is why it is important to think thoroughly about it and take into account all the necessary steps.
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Reasons Deregistration of Company Hong Kong
Closing down a business in Hong Kong should be avoided unless absolutely necessary. Common reasons for shutting down a company in Hong Kong include:
- Corporate restructuring within the association to which the company is affiliated.
- Failure to comply with statutory obligations, which may involve mismanagement of company affairs.
- Disputes among shareholders of the business.
- Inability to settle the company’s debts.
- Decline in profitability of the company.
- Inability to continue operations or conduct any business activities.
The process of deregistration of company Hong Kong is known as “liquidation.”. Companies can go through liquidation either by deregistration or winding up. Though the outcome of the procedures is practically the same, the way each procedure works is greatly different.
Which companies can go through the process of getting deregistered?
What all the Hong Kong businesses with a local limited structure or a local private company by guarantee can do is choose de-registration. Similarly, the companies have to be listed in the Companies Ordinance under section 749(2) or be registered under Part XI of the Companies Ordinance. Lastly, it should be a business that is no longer in operation and “defunct solvent” situation.
The word “defunct” comes here to mean a company that is not functional anymore and the word “solvent” refers to a company that does not have any debts or liabilities and it is very easy either to dissolve or close the company. In a nutshell, your company has to be free from any debts and legal problems as well it should not be conducting business.
What are the requirements for the deregistration of company Hong Kong
To qualify for deregistration, the company needs to meet the following requirements and conditions:
- The firm has not been engaged in any legal proceedings.
- There are no outstanding debts owed by the company.
- No operations or business activities have been conducted by the company for at least three months prior to the application for deregistration of company Hong Kong company (the application is submitted at least three months after the cessation date).
- All members of the business have unanimously agreed to the deregistration of the company.
- The company does not possess any immovable property in Hong Kong.
- If the Hong Kong business functions as a holding company, none of its additional properties include immovable assets located in Hong Kong.
- The Hong Kong business has received the “Notice of No Objection,” also referred to as the “Notice of No Objection to the Company being Deregistered,” from the Commissioner of Inland Revenue.
To deregistration of company Hong Kong, you have to file the corresponding forms with the Registrar of Companies. This is the step that must be executed after your HK business is entitled to receive the “Notice of No Objection”. The “Notice of No Objection” and the necessary fees should be presented together with the form.
Key Points to Consider for Deregistration of company Hong Kong
- Ensuring that a business submits all overdue Annual Returns and complies with the relevant duties of a company under the Companies Ordinance while continuing to operate until the dissolution of the company, is one of the prerequisites of the application for deregistration. Companies that will fail to do so would also face prosecution.
- To check the Gazette Notice about the deregistration of company, which is the government’s official notice to the public, you need to go to any of the government’s Companies Registry by using either the Company Search Mobile Service or the Cyber Search Centre and check your company’s public records.
- If you have been approved for de-registration, and you decide you do not want to de-register, you will have to submit an application for the company’s restoration to the Court of First Instance under section 765 (2) of the Companies Ordinance and then visit IRD for legal help.
- If you decide to change your address, it is necessary to inform the Companies Registry by sending a letter to facilitate future communications.
- If the registered office address has been changed of your company, you will need to fill the necessary form so as to allow the Government to know about the changes and in case the address of the directors has been changed, the Form ND2B needs to be filled to report the changes.
If you have the necessary qualifications and meet the criteria, you can continue with the proceedings. There are two steps to follow when you deregister a company:
Step 1: Procedure with the Inland Revenue Department
As the deregistration process is carried out, the company will obtain a letter, generated by an Inland Revenue Department department. In the case of property acquisition, Form IR1263 needs to be filled and submitted together with the amount of the required fee to the Commissioner of the Inland Revenue. This fee is a cost for any case regardless of the consequence and application.
Step 2: Dealing with Companies Registry
Once the company has obtained the “Notice of No Objection” from the IRD, you must complete the form along with the company deregistration application and submit it to the Registrar of Companies. Below are the fees associated with these processes:
The fees for company deregistration, including those for the Companies Registry (CR) and the Inland Revenue Department (IRD), amount to $95 and $45 respectively. Additionally, the company resolution of directors to dissolve the company incurs a fee of $55. If appointing a proxy for the company deregistration process, such as FastLane Group, contact us for a quotation.
Generally, the procedure for the de-registration of offshore companies in CRC is quite clear.
Upon receipt of the “Notice of No Objection” letter from the IRD, the company can proceed with deregistering the company in the company Gazette. The applicant must then submit the following documents to the Companies Registry:
- NDR1 form
- “No Objection” Notice from the Commissioner of Inland Revenue
- Additional information or documents that the Companies Registry of Hong Kong needs for the application to deregister the company upon the liquidator’s approval.
Step 3 – Deregistration after “Notice of No Objection” Letter
Once the necessary documents are assembled, the company can submit them to the CR. The final steps of the deregistration process would then proceed as follows:
- If the Companies Registry verifies that all documentation is in order, the process moves forward, and the Letter of Approval for the company’s deregistration application is issued within five working days.
- Following this, the CR publishes a notice of the intended company deregistration in the Gazette of Hong Kong. If no objection notices are received by the Registrar within three months of the announcement, the process proceeds to deregister the company. A final notice is then issued in the Gazette, announcing the impending deregistration, and the applicant or nominated person is duly informed.
- Upon the issuance of the final notice, the company is dissolved. The entire procedure is completed within five months.
- Upon dissolution, all company assets, including the balance of funds in the company’s bank account, are considered bona vacantia and are held by the Hong Kong Government’s Special Administrative Region. It is highly recommended to seek legal or professional advice to ensure proper disposal of the company’s assets before applying for deregistration.
- It is crucial to inform the Business Registration Office of the Inland Revenue Department within one month of discontinuing business to apply for cancellation of Business Registration.
- Until company deregistration is finalized, the company must continue to comply with obligations such as updating the registered office address and filing annual returns.
Conclusion
Deregistration of company Hong Kong must be done with a few important regulations and the due payments of relevant statutory procedures. It is strongly advised that you consult a professional company like Fastlane that is capable of providing suitable guidance. The corporate secretary service offered by Fastlane can be of timely assistance in the process of dismantling your Hong Kong entity.
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