Deregistration in Hong Kong

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Want to close your business? You may consider deregistration which is a relatively simple, inexpensive and quick procedure for dissolving defunct solvent companies.

What types of companies may apply?

A private company or a company limited by guarantee may apply for deregistration. However, the following two types of companies are not entitled to apply for deregistration for dissolution:

  • The companies specified in s749 of the Companies Ordinance e.g. public companies, banks, insurance companies, trust companies, etc. and their holding companies during the five years immediately before the deregistration application is made; and
  • A registered non-Hong Kong companies under Part 16 of the Companies Ordinance.

Under what conditions can an application be made?

If your company meets ALL of the following conditions, the company itself, a director or a member of the company may make an application for deregistration to dissolve the company:

 

  1. all the members of the company agree to the deregistration;
  2. the company has not commenced operation or business, or has not been in operation or carried on business during the 3 months immediately before the application;
  3. the company has no outstanding liabilities;
  4. the company is not a party to any legal proceedings;
  5. the company’s assets do not consist of any immovable property situate in Hong Kong;
  6. if the company is a holding company, none of its subsidiary’s assets consist of any immovable property situate in Hong Kong; and
  7. the company has obtained a “Notice of No Objection to a Company being Deregistered” (“Notice of No Objection”) from the Commissioner of Inland Revenue.

What need to be arranged before the application for deregistration?

If the company will be dissolved on deregistration and, upon dissolution, all the company’s assets, if any, would be vested in the Government of the Hong Kong Special Administrative Region as bona vacantia. Therefore, before the application for deregistration, you should clear all the assets and liabilities of your company. For example:

  • If your company is a holding company of other companies, the holding relationship should be ceased before the company is deregistered;
  • Dispose the stock, machine, motor vehicle, land and property (if any) etc.;
  • If your company maintains bank accounts, the balances in the accounts should be cleared and then proceed the account closure after confirmed there is no more bank transactions are required e.g. receiving sale proceeds or deposits and making payment etc.;
  • For the outstanding debts, your company has to settle all of that. Alternatively, the debts can be either settled by the directors, members, holding company or related companies OR waived by the creditors e.g. the directors, members, holding company or related companies.

How to obtain the Notice of No Objection?

Before making application for deregistration with the Companies Registry, you should also apply for a Notice of No Objection from the Inland Revenue Department (“IRD”) first. This procedure is also known as tax clearance and is the most critical part. Your company should clear all the outstanding tax issues e.g. any outstanding profits tax return, business registration fee, offshore claim etc. and pay all the necessary tax with the IRD. If no outstanding tax issues, the IRD will issue the Notice of No Objection to the company. 

 

In order to proceed the tax clearance, the company would need to prepare the final accounts of the company from the last set of audited financial statements up to the business cessation date and submit it to the IRD. Business cessation date is a date that the company’s trading businesses ceased. Typically, that would be the date of your last invoice was paid or your last expense incurred.

What are the procedures and how long does it take?

When you have obtained the Notice of No Objection from the IRD, you should deliver an application for deregistration to the Registrar of Companies, within 3 months from the date of issue of the Notice of No Objection, together with the required fee and the Notice of No Objection.

 

After the submission of application for deregistration, an acknowledgement notice will be issued within 5 working days. The Registrar will publish a notice of the proposed deregistration in the Gazette. If no objection is received within 3 months, the Registrar will deregister the company by publishing a second notice in the Gazette to declare that the company is deregistered on the date of the second notice. The company is dissolved on deregistration. You will be informed with a separate letter from the Registrar. The entire process takes about 5 months. 

What statutory obligations during and after the deregistration have to be observed?

Your company still has to observe its statutory obligations until it is formally dissolved on deregistration e.g. maintain registered office, company secretary, designated representative, file the Annual Returns, report of changes etc.

 

The director of the company immediately before the dissolution should keep the company’s statutory records for at least 6 years after the date of dissolution. 

 

A company dissolved on deregistration still may restored by an application to the Court for the restoration of the company to the Companies Register within 20 year from the date of dissolution by its director or member or creditor. 

 

Need help? No worries, Sleek will guide you through the whole deregistration process.

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