How to Close a Company in Hong Kong?
It is often easier to incorporate a company than to close down one in Hong Kong because the government needs to ensure the company is not in debt or violating the laws before it is officially deregistered. A company can be incorporated as fast as one day. Conversely, closing down a company can take around 6-10 months. Cheap Incorporation is a professional company formation agency and a TCSP-licensed company secretary. We can assist you with the close-down process hassle-free so make sure you pay full attention to this article as it aims to provide you with further information on what is required to close down a company and the approximate timeline for the entire procedure.
Basic Requirements of Deregistration
Just imagine the company you work for is suddenly closed down when you show up to work one day, you will be shocked and worried as you have not received a notice in advance. This is essentially why it can take such a long time to close down a company in Hong Kong because this particular scenario just shows how an improper close-down can stir upheavals in society, assuming salaries and debts are yet to be settled in this case.
First of all, for a company to be closed down, it must first attain approval from all its members. Additionally, the company must not commence business operations at least 3 months before closing down. Furthermore, the company cannot have any outstanding liabilities (debt or unfiled taxation), be involved with any legal proceedings, or have assets that consist of any immovable properties situated in Hong Kong. Additionally, if the company is a holding company, then none of its subsidiary assets can consist of any immovable properties in Hong Kong.
Not to mention. you should dispose of your company’s properties (motor vehicles, land properties, etc.) or withdraw all funds from your bank before submitting the close-down application. Once the government approves your application; all the company’s properties, if any, will be vested in the Hong Kong government as bona vacantia which means you will not be able to withdraw funds from the bank once the Government approves the closedown.
Process of Deregistration
To apply for deregistration, you must first fill out the ir1263 form issued by the Inland Revenue Department (IRD). The IRD will verify whether you have outstanding debts or taxes and if all things are cleared, it will issue a No Objection Notice to you. This process (phase 2) can take 1 to 2 months to complete. If your company has not commenced business operations before closing down, please see the screenshots below for reference.
Make sure you tick No for all the boxes provided, put down your personal information such as your full name, date of filing, contact number and postal address etc.
If your company has commenced business (the company has to be inactive 3 months prior to closing down). Please fill out the form as it’s shown in the screenshot below. As for the second page, it remains the same as if your company has not commenced business at all. Aside from filling out your basic personal information, please make sure you check the No box next to where it says Whether the company is a “Company Limited by Guarantee. Put down your full name and set yourself as the company director in the sentence below.
Once the No Objection Notice is issued, you can then proceed to file for an NDR1 form and submit it to the Hong Kong Companies Registry together with the notice. If the Companies Registry confirms your company is eligible to apply for deregistration, it will publish a notice in the gazette. If no objection to the deregistration is received within 3 months of the first notice, the Hong Kong Companies Registry will officially deregister the company by publishing a second notice in the Gazette and this part (phase 2) can take around 5 to 7 months to complete. This concludes the entire close-down process of a company, and we hope you gain some insights on how to effectively close down a company.
As a professional company secretary in Hong Kong, we are dedicated to delivering the most inclusive company formation experience to you with satisfaction guaranteed! With that being said, if you are interested in closing down your company, please feel free to contact us by email at info@cheapincorp.com or via WhatsApp at +852 5404 0902.