9. Dissolution of company by way of de-registration

9. Dissolution of company by way of de-registration

There are two major means to close a company where the company is solvent: (1) de-registration and (2) members’ voluntary winding-up.  Deregistration is a relatively short, low-cost and easy procedure for dissolving defunct private companies who meet certain specific requirements. On the other hand, for a traditional winding-up process, a company is wound up when a liquidator is appointed to settle the books, pay off any debts, liquidate its assets, and distribute any remaining funds to its shareholders.

This part primarily discusses the dissolution of a company by way of de-registration.

Requirements

The company must be a solvent private company or company limited by guarantee incorporated under the Companies Ordinance (Cap. 622). In order to close down the company by way of de-registration, the company must meet the following conditions:

• All the members of the company agree to the deregistration;
• The company has never commenced business or operation, or has ceased to carry on business or ceased operation for more than 3 months immediately before the application;
• The company has no outstanding debts or liabilities (including pending payments to e.g., suppliers, employees in or outside of Hong Kong);
• The company is not party to any legal proceedings;
• The company has no immovable property situated in Hong Kong;
• If the company is a holding company, none of its subsidiary’s assets consist of any immovable property situated in Hong Kong; and
• It has obtained a written notice of no objection from the Commissioner of Inland Revenue (either the director or the company can nominate a person to make the request) (“Notice of No Objection”).

Procedures

If all the above conditions are met, an applicant may submit to the Companies Registry within 3 months from the date of issue of the Notice of No Objection:

• a duly completed Companies Registry Form NDR1, "Application for Deregistration of Private Company or Company Limited by Guarantee" together with a non-refundable fee;
• the original Notice of No Objection; and
• any additional information or documentation that the Companies Registry may need in relation to the application.

Within 5 working days, the Companies Registry will issue a letter acknowledging receipt of the deregistration application if it determines that all supporting evidence is in order. The proposed deregistration notice will thereafter be published in the Gazette by the Registrar. If it does not receive any objections within three months of publishing the first notice, the Registrar will move forward with the deregistration procedure by issuing a final notice in the Gazette declaring the company to be deregistered on the date of publication of the notice and duly notifying the applicant or nominated person of the same.

Assuming without any undue delay, the entire process may take up to 6 – 8 months.

Upon dissolution of the company, the Government of the Hong Kong Special Administrative Region shall become the legal owner of all of the company's property, including any credit balances in the bank account. As such, before submitting an application for the company's deregistration, you are advised to consult a lawyer or other professional to ensure the right disposition of the company's assets.

To seek a cancellation of your business registration, you must give written notice to the Inland Revenue Department's Business Registration Office within one month of the date the business closed down.

Until the company is deregistered, compliances must still be followed, such as filing yearly returns and notifying changes to the registered office.

Restoration of a deregistered company

A business that has been deregistered may file a restoration application with the Court of First Instance according to section 765.