Regardless of the specific reason or business decision, sometimes a company is not successful and its founder needs to consider closing the business. A company may be struck off the Register, a process known simply as deregistration. There are a few conditions to do this:
Deregistration must be agreed by all members of the company;
The company must not have had any business in the 3 months before the application;
The company has no significant liabilities and is not involved in any legal proceedings;
The company has no assets in the form of real estate in Hong Kong;
Obtained a Notice of No Objection from the Commissioner of Inland Revenue.
In addition to complying with these main conditions for deregistering a company, the applicant is required to pay a non-refundable fee and submit a special form. Investors should note that dissolution of a company by liquidation is a different process under another set of procedures (mainly depending on whether the liquidation is initiated by members or creditors or by the court).
A deregistered company needs to meet its tax and reporting obligations before being dissolved or face penalties. In practice, the process can take around five months, during which time companies are expected to comply with the usual regulations. Deregistration may be an option for investors who wish to temporarily cease business operations, as it is a process that can be reversed. In practice, this means that a deregistered company can be reinstated if the owner applies to the Court of First Instance. Once the court orders this process, business can be restored within approximately 2 months. Investors who are considering this option are advised to seek appropriate assistance from our Hong Kong company formation consulting team.
Investors in Hong Kong have the option to apply for administrative recovery of local companies. This means that a dissolved company can be restored by a director or company member within 20 years from the date of dissolution. This is a special process which is subject to a set of specific conditions, such as the company must have been operating and conducting business at the time its name was struck off from the Register. A special, non-refundable reinstatement fee applies. A restored company can keep its own name, provided that the name has not been claimed by another company. If this is not the case, the restored company has 28 days to change the name.
When a business faces bankruptcy, for whatever reason, entrepreneurs have the option of winding up the business. In these cases, it is advisable to seek professional help, as the procedure can be complicated, depending on the number of creditors. One of our consultants who specialize in Hong Kong company formation can also help you wind up your company.
Hong Kong Company Deregistration Conditions
If the investor wants to stop all business in Hong Kong or the company is defunct, the limited company in Hong Kong can be deregistered.
Only companies established in Hong Kong can be deregistered. Several steps are essential to this process and they include filing with the Inland Revenue Department and effective deregistration from the Companies Registry.
Our company formation consultants in Hong Kong can assist you during the deregistration process and provide you with additional information depending on your company type and the business you are conducting in Hong Kong.
A failing solvent company may be deregistered if:
All members of the company agree to the deregistration;
The company has not carried out any business or has ceased any business in the three months before the application for deregistration;
The company has no significant liabilities to creditors;
The company does not own any real estate located in Hong Kong;
The company was not involved in any litigation or other legal proceedings in Hong Kong at the time of the application for deregistration.
If the company to be deregistered is a holding company in Hong Kong, its subsidiaries must not own any real estate assets located in Hong Kong.
The first step in deregistering a Hong Kong company is to obtain a Notice of No Objection to a Company being Deregistered from the Commissioner of Inland Revenue.
Deregistration from Hong Kong Companies Registry
Once the Notice of No Objection has been issued, the owner of the company can then lodge a final application for deregistration with the Companies Registry. This notice is filed with the Registrar in printed or electronic form together with the application and the application fee. The registrar may require additional company documents.
Deregistration applications are usually processed by the Registry within five working days. Afterwards, the deregistration will be gazetted. Once the deregistration is final, the company is dissolved.
If the company owner wishes to deregister before the company has received the business registration certificate, they can contact the Business Registration Office after the deregistration application has been approved.
open company hong kong
how to set up a limited company in hong kong