Coming to the decision to strike-off and deregister your Hong Kong company isn’t easy. There are many reasons why a company owner might come to this decision, and if you really decide to dismiss your business, you need to know all of the procedures you need to take.
Closing a Company in Hong Kong requires you to take some specific steps and the first step is to file for deregistration.
How to become eligible for deregistration
It’s important to state that not all Hong Kong companies are eligible for deregistration. Only private and local companies that are limited by guarantee can apply for deregistration. The exception is the 8 types of companies listed in Section 749 (2) of the Companies Ordinance.
This process of deregistration by itself is simple, but you have to meet certain conditions, including the following ones:
- The Company needs to be a defunct solvent with no outstanding debts or liabilities.
- The Company can’t be involved in any legal procedures or have any legal cases against them.
- The Company doesn’t own any immovable property that is located in Hong Kong.
- There can’t be any business operations within the company for three months before filing for deregistration.
- Every member of the organization needs to provide consent for deregistration.
- The commissioner of the Inland Revenue Department needs to issue a receipt of the “Notice of No Objection”.
How to deregister your company
Once you meet all of the above-mentioned criteria, you can apply for deregistration in just two simple steps.
The first step is to apply for a “Notice of No Objection to a Company Being Deregistered”. To do this, you need to go to the Inland Revenue Department website, download the Form IR1263, and fill it out.
Once you fill out the form and pay a non-refundable fee, you need to submit all of your documents to the Companies Registry. After the IRD evaluates all of your documentation and finds that it is in order, they will issue the Letter of Approval within five working days.
Next, the Gazette of Hong Kong will publish a notice of deregistration. If within three months the Company Registry doesn’t receive any “no objection” notice, the process of deregistration can proceed.
A final notice regarding deregistration will be published in the Gazette and the nominated person will be notified of the approval. After this whole process, which can take up to 5 months, the company is dissolved and all of its assets are deemed bona vacantia.
Things you need to take care of before deregistration
Before you submit your deregistration request, make sure to:
- File all outstanding annual returns per the Companies Ordinance for as long as your company is operational up until it’s dissolved.
- Send a notice about your company’s deregistration to the Business Registration Office within one month before the process is completed.
- Close the company’s bank account and cancel all credit cards.
- Properly dispose of all company property such as land and motor vehicles.
The difference between striking-off and deregistration
While both of these are methods used to dissolve companies in Hong Kong, there is a big difference between them.
Deregistration, as a recap, is a process that company owners go through when they want to dissolve their own company. It can be done very quickly and simply even though there are some requirements from a legal standpoint.
On the other hand, striking-off is a statutory power only the Registrar of Companies has. If a company can’t make the application that’s required to strike-off, the decision falls to the Registrar. If your Hong Kong company is no longer conducting business, the Registrar will strike it off and dissolve it, making this process more out of control of the Company.
There are numerous reasons why you would want to decide to deregister your Hong Kong company. As you can see, the process can be quite complex depending on the nature and structure of your business. Sleek can help!
Sleek is an experienced corporate service provider in Hong Kong and Singapore that can assist you through the Hong Kong company strike-off and deregistration process. Check out their website and get in touch today.
About the Author
Rachel is the marketing manager at Sleek. Besides planning marketing activation and foraging partnerships in the startup community in Hong Kong, she enjoys cooking and watching crime documentaries.