Steps To Closing A Hong Kong Business

When an entrepreneur finally has decided to close his/her business, below are the most common reasons:

The cost of business operation is too high, including the rent of your office.

The earning of your business cannot cover your expenses, and it has been happening for more than six months.

In some cases, the entrepreneur (or founder) is not the only shareholder of the business. When two or three business co-founders do not get along with opinions on how to run the company, it takes time and patience to resolve the issues. But there may be cases where it is more beneficial for everyone when they decide to part ways.

Notice of No Objection

When all the documents are submitted and are in right order at the Companies Registry, the company de-registration process would be taken forward. The letter of approval would be issued within five working days after the submission.

The Companies Registry would publish a notice of the intended de-registration in the Gazette of Hong Kong.

The process would move forward when the Registrar receives no objection notices within three months after the announcement is published. The final notice in the Gazette would be issued. The applicant will get notified.

After the final notice, the company will get dissolved.

Within five months, the entire procedure will be executed.

Once the company has been dissolved, all the company’s assets that includes the balance of the credits in the bank account would be deemed to be bona vacantia. The assets would be kept by the HKSAR.

You should endeavor legal or professional advice to guarantee the proper disposal of the all the assets before proceeding with an application to deregister the company.

It is important to notify the Business Registration Office of the Inland Revenue Department within one month of the date about the business being discontinued. The Business Registration should be cancelled.

The company still has to adhere to compliances (including the filing of annual tax returns) until the de-registration is fully completed.

Winding up or deregistration

The major differences between winding up a company and deregistering a company are below:

Winding up is the default way to designate a liquidator who would settle all the accounts and debts.

Deregistration is rather relatively inexpensive.

Deregistration is simpler.

Usually de-registration is the preferred method to closing a company.

Fees required

The fees would include a fee for company deregistration (for Companies Register and Inland Revenue Department), and company resolution of directors. One option is to appoint some agencies or a re-register to provide the service.

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