Closing down of a company in HK involves certain formal steps and overall procedure will take months to complete. It depends on how a company is closed, the process can be costly thus decision to do deregistration HK company should be done after careful consideration. This article serves as a guide on the options available to close down a company in Hong Kong. Some common reasons of closing the company include:
- Company is not profitable
- Failure to continue their business
- Falling out between the shareholders
- Inability to pay debts
- Company restructuring of a group where company belongs
- Non-compliance with the statutory requirements, which includes mis-management
Process of deregistration HK company is referred as “liquidation” in layman terms. Companies are liquidated by “De-registration” and “Winding Up“. Even though both these procedures may result in dissolution of the company, processes they demand are different.
Deregistration HK is the simple, quick and inexpensive procedure to dissolve defunct private corporations who meet some specific requirements. And winding up is a process to appoint the liquidator who can settle all accounts, pay company’s debts, liquidate the company assets and distribute surplus assets to the members, ensuring company is dissolved completely. Given the complexities, you’re advised to engage services of the professional company who can handle closing down of company in HK.
De-registration of any company
Company should be the solvent private firm incorporated under HK Companies Ordinance, besides those companies that are specified in the section 291AA(16) and registered under the Part XI of Companies Ordinance, and should meet following requirements:
- Company has not commenced business and operation, and has ceased to continue business and ceased operation for 3 or more months immediately before its application
- Company has got no outstanding liabilities
- Has obtained written no objection notice from Commissioner of the Inland Revenue
- All company members agree to deregistration HK