
Deregistration of a company in Hong Kong is the formal process of removal from the Companies Registry. Companies usually opt for deregistration upon the cessation of business operation and in order to avoid further administrative obligations. The regulatory process of deregistration involves an understanding in order to avoid legal complications or financial liabilities.
What is Deregistration?
Where it differs from company dissolution, technically speaking, deregistration refers to the official closure of the company. It is a purely voluntary act on the part of the company itself, while in certain circumstances, a company may be legally dissolved due to various reasons, such as failure to comply with the appropriate legislation. The other thing worth noting here is that deregistration must be clearly distinguished from another procedure called “strike off,” which might also lead to a legal dissolution of the company.
Eligibility Criteria for Deregistration in Hong Kong
The following preconditions are requirement to deregister a company in Hong Kong.
- It does not have any liabilities.
- It is not running the business.
- No-objection notice from IRD for having no tax due is taken.
Step-by-Step Deregistration Process in Hong Kong
Here is how a company in Hong Kong is deregistered in some step-by-step process:
Apply for a No Objection Notice: Before deregistration commences, the company has to apply a no-objection notice from IRD.
Application Submission to registrar: Following receipt of the notice, the business must file an application to the registrar for deregistration.
Gazette Notice: The consequence of deregistration occurs upon the date of the notice in the Government Gazette. Deregistration actually takes a few months.
Who Can Make the Request
To deregister of a company
- a director of the company
- a member of the company or any person nominated by the company (with a copy of authorization letter signed by a director of the company)
To deregister of an LPF
- a general partner in the LPF
- an authorized representative of the LPF appointed under the Limited Partnership Fund Ordinance
How to Make the Request
The applicant is required to submit to the Commissioner of Inland Revenue
- a completed Application Form (IR1263);
- a fee of $270 which is non-refundable regardless of the result of the request
What Occurs After Deregistration?
Once struck off the register, it implies that the company no longer exists. The directors and shareholders are freed from their responsibilities, and no business activities may continue to take place. However, before it can proceed, any remaining assets and liabilities, if there are any, should be disposed of in advance.
How to Prevent or Halt the Deregistration Process
Therefore, deregistration can only be stoppable if the company has changed its mind or does not meet the eligibility criteria. Any attempts to stop the deregistration process will involve the submission of appropriate forms to Companies Registry for filing.
Deregistration as an Alternative to Striking a Company Off
Another method of closure of a company in Hong Kong is by striking off. This is in contrast to voluntary deregistration. Striking off involves the removal of a company by the Registrar of Companies from the register due to reasons of non-compliance. This process also leads to the dissolution of the company but is generally less voluntary and may have different legal implications.
Consequences of Deregistration
Deregistration of a company entails several legal and financial consequences:
Tax Liabilities: The due amount of taxation must be clear prior to deregistration.
Company Assets: Any undistributed assets of the company will go to government in case of its failure of proper distribution.
Contracts and Liabilities: Outstanding contracts or liabilities, if any, are to be sorted out prior to deregistration so as to avoid complications.
Conclusion
The deregistration of a company in Hong Kong should first be well planned to implement. In this regard, consultation with professionals can assist in ensuring that it is done properly, thus avoiding costly mistakes. You will find proper guidance on how to efficiently navigate everything regarding deregistration from a legal and financial point of view.
How FastLane HR Can Help
FastLane HR provides professional advice on Hong Kong company deregistration and closure. Whether you need help with the deregistration procedure or would like to get alternative solutions, our specialists can make this process smooth for you. Please feel free to contact us today for more information!