How to deregister a Hong Kong company (Form NDR1)

The usual way to close a solvent Hong Kong private company that has stopped trading is deregistration. You first get a Notice of No Objection from the Inland Revenue Department, then file Form NDR1 with the Companies Registry within 3 months, with a non-refundable fee of HK$420. The Registry publishes a notice in the Gazette, waits 3 months for objections, and then deregisters the company, which dissolves it. The route is only open if every member agrees, the company has not done business for 3 months and it has no outstanding liabilities. A company that does not qualify has to be wound up instead, which is a different procedure.

Who can use deregistration

The Registry’sderegistration pagesays only a local private company or a local company limited by guarantee can apply, and it must be a defunct solvent company. Companies specified in section 749(2) of the Companies Ordinance are excluded. A non-Hong Kong company registered here does not use this route.

The conditions

Before you apply, every one of these must be true. They come from sections 750(1) and (2) of the Companies Ordinance, as set out in the Registry’sderegistration FAQ:

• all the members of the company agree to the deregistration;
• the company has not commenced operation or business, or has not been in operation or carried on business during the 3 months immediately before the application;
• the company has no outstanding liabilities;
• the company is not a party to any legal proceedings;
• it has no immovable property situated in Hong Kong;
• if it is a holding company, none of its subsidiaries’ assets consist of immovable property in Hong Kong;
• the Commissioner of Inland Revenue has issued a Notice of No Objection.

Step by step

1. Stop trading and settle every liability: suppliers, landlord, staff, and the company’s own tax and fees.
2. Deal with the company’s assets, including its bank balance. Anything still held by the company when it is dissolved goes to the Government (see below).
3. Get every member’s agreement to the deregistration, and wait until the company has done no business for 3 months.
4. Apply to the Commissioner of Inland Revenue for a “Notice of No Objection to a Company being Deregistered” on form IR1263.
5. Within 3 months from the date the Notice of No Objection is issued, deliver Form NDR1, Application for Deregistration of Private Company or Company Limited by Guarantee, with the Notice and the HK$420 fee, to the Companies Registry.
6. The Registrar publishes a notice of the proposed deregistration in the Gazette. Unless an objection is received within 3 months after publication, the Registrar may deregister the company.
7. The Registrar publishes a second Gazette notice declaring the company deregistered. The company is deregistered, and dissolved, on the date that notice is published.

Fees and timing

Put together, the company needs at least three months of no business before NDR1 goes in, and then at least three months after the first Gazette notice. From the last day of business to dissolution is therefore more than six months. Plan the final accounts and any annual return that falls due in that time with this in mind.

Keep filing until the company is dissolved

Applying is not the end of the company’s duties. The FAQ says that until the company is deregistered and dissolved, it must still observe its statutory obligations under the Companies Ordinance, including the delivery of annual returns. A private company that misses its NAR1 pays the late fees inNAR1 fee and annual return penalty, and the company and its officers can be prosecuted.

What happens to anything left in the company

When a company is dissolved by deregistration, every property and right vested in or held on trust for it immediately before dissolution vests in the Government as bona vacantia. That includes money left in its bank account. Empty the account, close it, and transfer or sell anything the company owns before you apply.

Mistakes that sink an application

• Applying while there is still a small unpaid bill, which means outstanding liabilities.
• Forgetting one member’s agreement.
• Filing NDR1 more than 3 months after the Notice of No Objection was issued.
• Leaving money or property in the company, which goes to the Government on dissolution.
• Confusing deregistration with dormancy. Adormant companykeeps existing; a deregistered one does not.

Getting help

The company secretary usually prepares the members’ agreement and the filings. Seewhat a company secretary does, and check a firm on the official register withchecking a TCSP licencebefore you hire it. Our directory listscompany secretary firmsto compare. If the company has debts it cannot pay, or property, talk to a solicitor or an accountant about winding up. The Companies Registry and the IRD decide each application, and this page is not legal or tax advice.