Frequently Asked Questions regarding the Deregistration of a Hong Kong Incorporated Company
Q1. How to deregister a Hong Kong company?
A1: Once you have come to the conclusion that you no longer need your Hong Kong company, you can apply to the Hong Kong Companies Registry to deregister it officially.
The deregistration process starts with the application for a Notice of No Objection from the tax authority. This is very similar to getting a tax clearance letter from the tax aurthority (Inland Revenue Department). Once the company receive the Notice of No Objection, the company then files the application for deregistration with the Companies Registry together with the original copy of the Notice of No Objection.
In most of the cases, a deregistration application will take around 6-8 months to process. A company is officialy deregistered upon receipt of a confirmation letter from the Companies Registry.
Q2. Why a Notice of No Objection (NNO) is required?
A2. With effect from 11 November 1999, a Hong Kong incorporated private company which has ceased its operation and is solvent may apply to the Companies Registry under s. 291AA of the Companies Ordinance (Cap. 32) for deregistration. However, the application must be accompanied by a NNO issued by IRD under s. 88B of the Inland Revenue Ordinance (Cap. 112). The nature of the Notice of No Objection is a clearance letter evidencing that the company, as of the date of issue of the letter, does not owe any money, such as outstanding business registration fee or tax or levy, to the Hong Kong Government.
Q3. Who can make the request for a NNO?
A3. (1) A director
(2) A member or nominated person of the company, with copy of authorisation letter signed by a director of the company.
(3) If the nominated person is a practising professional, e.g. accountancy/secretarial or solicitor firm, submission of evidence of authorisation is not required unless requested by IRD.
Q4. What documents should be submitted when making the application?
A4. (1) A properly-completed Application Form (IR1263); and
(2) A crossed cheque, draft or cashier order in the amount of $350 for the application fee.
Your application will be rejected if:
(1) the Application Form is not properly-completed; or
(2) your cheque is not properly-drawn or is dishonoured.
Q5. When shall I expect to receive the result of the application?
A4. Normally, a Notice of No Objection, or a Notice of Objection if there are unsettled tax matters or liabilities, will be issued within 25 working days from the date of receiving the application or the fee, whichever is the later. In practice, If there are any unsettled tax matters or liabilities, the Inland Revenue Department will issue a letter listing all outstanding issues for your settlement. Once those outstanding issues are fully settled, you can request the issue of NNO with paying the fees again.
Q6. What are the conditions to be considered for the issue of a NNO?
A6. A NNO will be issued if:
(1) the company has never commenced operation, or has already ceased business;
(2) the company will not start/resume business in the future;
(3) the company has disposed of all trading stock, landed property and securities, if any;
(4) the company has no outstanding tax liabilities (including those owed by the company in the capacity of an agent of an overseas business) which include Profits Tax, Property Tax, Stamp Duty, Business Registration fee, fines and penalties in connection therewith, costs of tax recovery including court fees, cost of execution, bailiff’s expenses, guard fee and judgement interests;
(5) the company has no outstanding obligations under the Inland Revenue Ordinance. These include submission of returns which have been issued by the IRD, liability to notify the CIR in writing that the company is chargeable to tax for any year of assessment in which a return has not been received;
(6) there are no unanswered enquiries from IRD;
(7) there are no unsettled objections or appeals in respect of assessments already raised.
Q7. If a defunct company applies for deregistration, can it submit unaudited accounts to supports its Profits Tax Return?
A7. No. The company has to submit audited accounts to support its Profits Tax Return unless it is a dormant company within the terms of the Companies Ordinance, i.e. the company has no accounting transaction during the accounting period.
Q8. If a defunct company applies for deregistration, does it need to keep accounting records? If yes, how long does it keep?
A8. Under s. 51C of the Inland Revenue Ordinance, every person carrying on a trade, profession or business in Hong Kong must keep sufficient records of his income and expenditure (either in English or in Chinese) to enable his assessable profits to be readily ascertained. Business records must be retained for at least seven years after the completion of the transactions to which they relate. This does not apply to a corporation which has been dissolved.
For a defunct company which applies for deregistration, it still needs to comply with the requirements of s. 51C of the Inland Revenue Ordinance before it is deregistered under the Companies Ordinance.
However, under s. 292(3) of the Companies Ordinance a person who was a director of a company immediately before its dissolution must ensure that all the books and papers of the company are kept for not less than 5 years after the dissolution.
Q9. My Hong Kong company is in the process of deregistration. However, it turns out now that I have some other business opportunity and I decide not to deregister it. Is it possible to stop the deregistration process? If yes, how could I do it?
A9: In this case, you can file a letter with the Companies Registry requesting that the deregistration be terminated.
Q10. My Hong Kong company was deregistered a few months ago and I recently realised that the company still had a substantial amount of rental deposit to be refunded by the landlord and the landlord would only refund the deposit by check. What could I do?
A10: You could apply to reinstate the company, open a bank account to cash that rental deposit and then apply to deregister the company again.