Have you been operating a company in Hong Kong and now want to deregister? Hold on for a moment! Though Hong Kong makes registering a company easy and direct, deregistration is the direct opposite. The process is expensive, involving, lengthy, and very perilous. Therefore, before considering pulling out, take time to rethink again.
In this post, we take you through the entire process of deregistration. We also provide some suggestions on making the process easy or alternatives to consider altogether.
The main reasons that make people consider Hong-Kong Company deregistration
Even with the huge potential that is Hong Kong market, one might ask; why should a company deregister? Here are some reasons that make people prefer deregistering their enterprises.
- When they find it difficult to continue operating in Hong Kong.
- Progressive losses because stiff competition
- Inability to meet company debts
- When shareholders fall out between themselves
- Restructuring of the mother company
Important facts about Hong Kong Company deregistration
- The name is struck off the company register.
- The bank freezes the account, and it will take about 60 days to get the cash that was in the bank account.
- The company members must agree to deregister the company.
- The company must have ceased operations about 3 months ago.
- The company must not have outstanding liabilities.
- The company must get a notice of no objection from IRD
How to deregister a company?
- Stop operations for about three months. This means ceasing to operate. During this time, it is important to clear all outstanding liabilities. You should also ensure that every legal obligation is met.
- Make application for a Notice of no objection. IRD mainly checks whether you have been filing returns appropriately and ensures any outstanding fees are cleared. If the IRD does not have an objection, it issues a form called NDRI.
- The NDRI is presented to the registrar of companies who puts up a gazette notice so that anyone with an issue about deregistration can come forward. If there is nobody who comes out to contest deregistration, the Companies Registrar issues another gazette notice that notifies commencement of deregistration.
- After the second notice, the company stands dissolved. This means that credit balances and any assets are taken over by the Hong Kong administration (bona vacantia). Therefore, you should consider disposing all assets prior to applying Hong Kong company deregistration.
- The company management is required to notify the IRD within 30 days after deregistration to ensure that the business license is also canceled.
The process of Hong Kong company deregistration is lengthy and could risk the shareholders losing the assets they had taken years to acquire. Therefore, it is crucial to be extra careful when deciding to deregister. You should particularly contract Hong Kong company deregistration professionals for assistance. In many cases, the experts might suggest selling the company or putting it on ice until the situation improves. However, if you still want deregistration, the experts will guide the process to make it smooth, affordable, and avoid losses.