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When it comes to ending business operations, closing a company is the last resort. In Hong Kong, ending business operations involves cancelling business registration, with different procedures for limited and unlimited companies. Failure to handle these procedures properly may potentially lead to financial losses. This article provides a comprehensive guide on how to properly cancel business registration and deregister a company, ensuring a smooth closure of your business.
How to Cancel Business Registration
Anyone looking to end their company or branch operations needs to fill out Form IRC3113 or provide written notice to the Business Registration Office to cancel the business registration within one month from the date of cessation. The following information needs to be provided:
- Business Registration Number/Branch Registration Number
- Date of Cessation
- Correspondence Address after Cessation and Contact Telephone Number
*Note: Even if your business operations have ceased, you are still required to pay the business registration fee until the end of the financial year in which the closure occurs.
How to Handle Closure of a Limited Company
For an unlimited company, cancelling business registration is sufficient to conclude business operations. However, for a limited company, you need to obtain a "Notice of No Objection" from the Inland Revenue Department before submitting an application to the Companies Registry to deregister the company. Limited companies that have not completed these procedures are still required to apply for a business registration certificate annually (depending on the validity period of the certificate).
The following are the procedures for handling the closure of a limited company:
- Submit a Notice of Cancellation of Business Registration.
- Obtain a "Notice of No Objection" from the Inland Revenue Department.
- Submit the "Notice of No Objection" along with the application for deregistering the company to the Companies Registry.
According to the Inland Revenue Department, the conditions for obtaining a "Notice of No Objection" are as follows:
- the company has never commenced operation, or has already ceased business;
- the company will not start/resume business in the future;
- the company has disposed of all trading stock, landed property and securities, if any;
- 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;
- 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 / LPF is chargeable to tax for any year of assessment in which a return has not been received;
- there are no unanswered enquiries from IRD;
- there are no unsettled objections or appeals in respect of assessments already raised.
According to the Companies Registry, the conditions for deregistering a limited company are as follows:
- All members of the company agree to the deregistration.
- The company has not commenced business or has not operated for the 3 months prior to the application.
- The company has settled all its debts.
- The company is not a party to any legal proceedings.
- The company's assets do not include immovable properties in Hong Kong.
- (For a holding company) The assets of all subsidiary companies do not include immovable properties in Hong Kong.
- A "Notice of No Objection to Deregistration" from the Commissioner of Inland Revenue has been obtained.
Assets Management Before Dissolving a Company
Before applying to dissolve a company registration, it is important to properly handle all company assets. Once the company is dissolved, its assets will be transferred to the Hong Kong government. Therefore, it is highly recommended to seek professional advice and properly handle company assets such as bank balances, properties, vehicles, etc., before closing down the business to avoid any losses.
When it comes to ending business operations, the last thing you want is to encounter more complications through the application process. Common issues include improper handling of company assets, unresolved annual filings, and tax problems. The deregistration process for a limited company is more complex than for an unlimited company, which is why it is recommended to seek advice and assistance from a professional company secretary.
At OneStart Business Centre, we provide comprehensive company secretary services with years of expertise to help you smoothly cancel your business registration and deregister your company. For more information on cancelling business registration, call 3575 6888 or WhatsApp OneStart Business Consultant today!
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