Guide to Application for Deregistration of a Defunct Hong Kong Private Company
When a Hong Kong company, which is defunct and solvent or had ceased business for more than 3 months and now intends to be dissolved, it can apply to the Hong Kong Companies Registry to have itself officially deregistered. In applying for deregistration, certain declarations should be made by the applicant. Any person who knowingly and recklessly gives information to the Companies Registrar that is false or misleading in a material particular is liable to a fine and to imprisonment.
This article intends to give a brief description of the conditions, procedures and the consequences of deregistration.
1. Conditions for Application for Deregistration
In accordance with the Hong Kong Companies Ordinance, a private company, or a director or member of such a company, may apply to the Registrar under section 750 for deregistration. However, such an application could only be made if all of the following six conditions are met:
(1) all the members of the company agree to the deregistration;
(2) the company has never commenced business or operation, or has ceased business for more than three months immediately prior to the deregistration application;
(3) the company has no outstanding liabilities;
(4) the company is not a party to any legal proceedings;
(5) the company’s assets do not consist of any immovable property situate in Hong Kong; and
(6) if the company is a holding company, none of its subsidiary’s assets consist of any immovable property situate in Hong Kong.
2. Notice of No Objection
The application must be accompanied by a written notice from the tax authority stating that the Commissioner of Inland Revenue has no objection to the company being deregistered. The tax authority will only issue such a Notice if the following conditions are met:
(1) the company has never commenced business, 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 which include Profits Tax, Property Tax, Stamp Duty, Business Registration fee, fines and penalties in connection thereof and court fees;
(5) the company has no outstanding obligations under the Inland Revenue Ordinance. These include submission of return(s) which has(have) been issued by the Inland Revenue Department, liability to notify the Commissioner of Inland Revenue 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 the Inland Revenue Department (IRD);
(7) there are no unsettled objections or appeals in respect of assessments already raised.
3. Companies Not Eligible for Deregistration
The following categories of companies are not eligible to apply for deregistration:
(1) an authorized institution as defined in the Banking Ordinance
(2) an insurer as defined in the Insurance Companies Ordinance
(3) a company licenced under the Securities and Futures Ordinance
(4) a company having a subsidiary that falls within any of the above categories, and
(5) a company that has fallen within any of the above categories at any time in the preceding five years
4. Consequences of Deregistration
If a company is dissolved under this Part or section 226A, 227, 239 or 248 of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32), every property and right vested in or held on trust for the company immediately before the dissolution is vested in the Government as bona vacantia. In other words, any property, including immovable property and movable property, which has not been properly disposed of would be deemed to be and would be taken by the Hong Kong Government.
Therefore, in applying to have the company deregistered, it is of important that all the liabilities of the company be settled and all assets disposed/processed. In particular, any balance in the bank account of the company should be transferred out.
5. Responsibilities and Liabilities after Deregistration
(1) Liabilities of the Company, Directors etc
Even though a company is dissolved under this Part, the liability (if any) of every director, manager and member of the company continues and may be enforced as if the company had not been dissolved.
(2) Keeping of Books of Accounts
If a company is dissolved under this Part or section 226A, 227, 239 or 248 of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32), every person who was a director of the company immediately before the dissolution must ensure that the company’s books and papers are kept for at least 6 years after the date of the dissolution.
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