Understand The Basic Requirements When Closing A Business

When dealing with deregistration of a company, itrequirescertain know-how and compliances with different statutory obligations. The procedure in company deregistration of Hong Kong would include the proper completion of the NDR1 form. The business owner must provide the original copy of the No Objection Notice from the Commissioner of Inland Revenue Department (IRD). HK Companies Registry may request you to submit more documents that are related to deregister your company.

Basic requirements

The basic requirements to have a company deregisteredinclude the following:

All the members (i.e. shareholders and director) of the company must agree upon deregistration.

The company should not have anyoutstanding debts (to other entities).

The company should not have been involved in any legal procedures.

The company must not have actively conducted any operations which are business related three months prior to the application of de-registration.

The company must not have any immovable property based in Hong Kong. When the company is a holding business of another business, the same applies.

Bear in mind the following items before going ahead to de-register your company.

This is important prior to the submission of deregistration application. Your company must file any outstanding annual returns. Itmust follow the duties according to the Companies Ordinance until the companyis fully dissolved.The company may be subject to be prosecuted when it does not comply.

You must notify the Companies Registry when there is a change of address (of the directors). Fill in the form (i.e. ND2B) for address update.

In short, any local limited company or any local private company are eligible for de-registration, as long as they have met the requirements mentioned above.

The common reasons

The common reasons the owner would “close” a company is when one of the following happens:

The company is unable to continue its business due to the personal reasons of the owner.

The company has been losing too much money.

The company owes too much debts where it cannot repay.

The shareholders of the business cannot work together anymore.

The company becomes non-compliance with statutory obligations.

Changing your mind

There is often scenarios where the deregistration of a company got approved, but the ownerthen decide the business should not be deregistered. The owner can rectify this by submitting an application to the Court of First Instance.This will restorethe company that is agreeable to the Companies Ordinance.

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