How to de-register a Hong Kong Limited company?
Closing a business in Hong Kong holds some particular number of orderly steps.
Are you running a HK Business that has come to a stand still where it hasn’t conducted business or any revenue for a while and you wish to de-register it? Keeping in mind that your business is no longer functional and that it does not have any debts or liabilities to fill for, there are chances that you can deregister the company.
Closing a business in Hong Kong holds some particular number of orderly steps, and the overall process takes some months to get completed. The costs of the process depend on how the company is being closed, which is why it is better to think carefully about it and consider accordingly.
But why close a Hong Kong Company?
Even though it might seem like something sensible to do, unless it is completely necessary, a person should avoid closing down a Hong Kong business. The common reasons why a company can be closed in Hong Kong are:
- Corporate restructuring of the association to which the company belongs.
- Non-compliance with statutory obligations, that also includes the mismanagement of company affairs, etc.
- The falling out between the shareholders of the business.
- The inability to pay the debts of the company.
- The company is no longer profitable.
- The failure of the company to carry on any sort of business.
The process of deregistering a Hong Kong company is known as “liquidation” in conventional terms. There are two methods of closing a company, one is by Winding it Up, and the other is by the deregistration process. Even though both the processes lead to the closing of the business and the dissolution of the company, the methods they entail are significantly distinct.
What is the difference between: Winding Up & Deregistration?
Before the deregistration process is explained, it is vital to know what is the difference between winding up a company in Hong Kong and deregistering a firm in Hong Kong. Deregistration is a comparatively simple, inexpensive and quick method for dissolving a defunct private company. But this business has to meet specific requirements in order for this to happen.
On the other hand, Winding up is the method of designating a liquidator who would settle all the accounts by also paying off the company’s debts, if there is any. This person is also in charge of liquidating the assets of a business and distributing the surplus assets, if there is any to members, making sure that the firm is completely dissolved. This process is much more complicated than de-registration, and requires more steps and parties to be involved. This can result in a longer process and higher cost for a company.
But since deregistration is relatively a simpler and easier process, it is preferred more by many business people and is the most common process in Hong Kong. And with the best experts in the industry and the knowledge on how the government agencies operate, Startupr can help you in this process if you decide to hire us. Though the process is not too complicated, not all companies in Hong Kong can just de-register their businesses easily.
You can close the business as you de-register it with just two steps, but only if you meet the requirements stated by the Hong Kong Government.
Which companies can apply for the deregistration?
Any HK business that is a local limited company or a local private company by guarantee is the one that is qualified to de-register itself. Also, these companies have to be listed in the Companies Ordinance under the section 749(2) or registered under the Part XI of the Companies Ordinance. It also needs to be a company that is a defunct solvent business.
“Defunct” here means a company that is no more a functional company and “solvent” is when the company does not have any debts or liabilities and can be dissolved or get closed easily. In short, your company needs to be clear from any debts and legal issues along with the fact that it is no longer operating.
Requirements & Conditions to Deregister a Company
Any HK business that wants to get de-registered has to meet the following requirements and conditions:
- The firm has not been involved in any legal procedures.
- There are no outstanding debts of the company.
- There hasn’t been any operation or business that was conducted in the company since three months before the application to de-register the Hong Kong company (application made at least three months after the cessation date).
- Every member in the business has agreed for the de-registration of the company.
- There isn’t any immovable property located in Hong Kong of the business.
- In case the HK business is a holding business, none of the company’s additional property has any immovable ones that are located in Hong Kong.
- The HK business has received the “Notice of No Objection” also known as the “Notice of No Objection to the Company being Deregistered” from the Inland Revenue’s Commissioner.
To de-register the Hong Kong company, you would need to submit the necessary forms to the Registrar of Companies. This is a step that must be taken after your HK business has received the “Notice of No Objection.” Both the “Notice of No Objection” and the needed fee must be submitted along with the form.
Startupr would assist you at every step so that you have the right guidance to de-register your company properly and on time.
Other Points to Keep in Mind
There are other points that need to kept in mind if you are about to move ahead and de-register the company in Hong Kong.
- It is crucial for the business to file any outstanding Annual Returns and follow its duties as per the Companies Ordinance until the firm has been dissolved, prior to submitting the deregistration application. And if a company does not do this, it would be subjected to prosecution.
- To find out about the Gazette Notice for your company’s deregistration, which is the government notices about something for the public, you need to check the Companies Registry’s Company Search Mobile Service or the Cyber Search Centre online on your Company’s public records. You can also check the main website for the notices at www.gld.gov.hk/egazette.
- In case you have had the deregistration of the company approved, and you decide that you do not want to deregister the business, you would need to submit an application to the Court of First Instance for restoring your company agreeable to 765 (2) section of the Companies Ordinance and visit the IRD for legal help.
- In case you change your address, you would need to inform the Companies Registry through a letter about it to make the future communications easier.
- In case the company’s registered office address has been changed, you would need to fill the necessary form for letting the Government know about the change and for the address of the directors that have changed, the Form ND2B has to be filed for reporting the changes.
If you are eligible and feel that you meet the requirements and still want to de-register the Hong Kong company, you can go ahead with the steps. As mentioned above, there are two steps to deregister a company and they are:
Process with Inland Revenue Department – Step 1
In this process, the company would need to get the notice that has been written by the Inland Revenue Department. For this, you would need to fill the Form IR1263 and submit it along with the fee to the Inland Revenue’s Commissioner. This fee is a non-refundable fee regardless the outcome of the situation and application.
How do I deal with CR (Companies Registry) – Step 2
After the company has received the “Notice of No Objection” from the IRD, you would then need to fill in the form along with the application for the deregistration and send it to the Registrar of Companies. The fee structure of the processes are as follows:
- Company Deregistration (CR & IRD) fees: $95 + $45
- Company resolution of directors to dissolve the company: $55
- Appointment of proxy (de-registrator – like appointing Startupr): $690
Overall procedure to de-register the Hong Kong company with the CR
Once the company has received the “Notice of No Objection” letter from the IRD, the company can proceed to de-register the company in the company Gazette. Along with this, the applicant has to submit the following to the Companies Registry:
- A properly completed form NDR1.
- The original copy of the “No Objection” Notice from the Commissioner of Inland Revenue.
- Any further information or documents that the Companies Registry of Hong Kong may request in connection with the application to deregister the company.
De-registration after letter of “Notice of No Objection” – Step 3
With the documents in place, the company can submit these to the CR. The final steps of the de-registration would take place, as the following.
- If the Companies Registry sees that all the documentation is in right order, the process would be taken forward, and the Letter of Approval would be issued for the company’s deregistration application within five working days.
- The CR would then publish a notice of the intended deregistration in the Gazette of Hong Kong. If there have been no objection notices that were received by the Registrar within three months of publishing the announcement, it will proceed with the process to deregister the company by issuing a final notice in the Gazette announcing the business to be deregistered. Along with this, the applicant or nominated person would also be duly notified of the same.
- Upon the announcement of the final notice, the firm will be dissolved.
- The entire procedure will be executed within five months.
- Upon dissolution of the organization, all the company’s assets that also includes the balance of the credits in the bank account of the business would be deemed to be bona vacantia and would be held by the Hong Kong Government’s Special Administrative Region. You are greatly encouraged to endeavor legal or professional advice to guarantee the proper disposal of the firm’s assets before proceeding with an application to deregister the company.
- It is vital to notify the Business Registration Office of the Inland Revenue Department within one month of the date of discontinuance of business, to apply for a cancellation of Business Registration.
- Until the company has been deregistered, it is still required to adhere to compliances that include the notification of situation of registered office and the filing of annual returns.
Professional Help
De-registration for a company in Hong Kong needs the essential know-how and compliances with various statutory obligations. Hence you are strongly recommended to engage the services of a professional firm like Startupr that can render you with the appropriate guidance and timely assistance for the deregistration of your Hong Kong company.
Hire Startupr to assist you with the proper guidance, giving you the details and advice for a better knowledge at each step. Either visit us, give us a call or just email us at info@startupregistry.hk for more details.