What to Do When Your Company Is Closing Down

Winding-up and Liquidation in Hong Kong can either be done voluntarily or by order of the court. The services of a professional can ensure no breach in-laws occur during this process.

In Hong Kong, when a company needs to close down, the process is called liquidation. There are two liquidation options. One is via deregistration and the second is by winding up the company. Both will result in a company being dissolved, but the process of doing it is different.

The deregistration process is relatively inexpensive, quick and simple. Winding up, however, involves appointing a liquidator. This makes it a more costly option.

Winding-up and Liquidation in Hong Kong

 

Do I Really Need Professional Services?

The answer is YES! Infractions and errors can happen out of ignorance and the consequences are severe. It could impact your future entry and exit in Hong Kong and possibly lead to arrest. That’s why you need 3E Accounting. Our familiarity with the entire complexities of the liquidation and deregistration process is an asset. Our knowledge and experience ensure no errors get made.

 

Why Would a Company Close?

Winding-Up and Liquidation in Hong Kong can happen for several reasons. The most common of which are:

  • The company can’t carry on business
  • Company is not profitable anymore
  • A company can’t pay debts
  • Company has fallouts between shareholders
  • Company isn’t complying with the statutory requirements
  • The company undergoes corporate restructuring

 

Voluntary Liquidation in Hong Kong

This is done by the shareholders under the following conditions:

  • Company’s accounting books are complete
  • All shareholders give consent
  • The company is solvent

A liquidator has been appointed to handle the process

 

Court Order Liquidation

Liquidation in Hong Kong can be ordered by the court. A petition can be put forth by the company, Company Registrar, Official Receiver or creditors. The court will delegate a liquidation once the order is issued. There will be many meetings involved in this process among shareholders, creditors and director.

 

Deregistering Your Hong Kong Company

Per the Companies Ordinance (Cap. 32) Section 291, you must fulfil the following criteria if you’re applying for deregistration:

  • All shareholders give consent
  • Company hasn’t commenced any business operations
  • Business operations have ceased in the last 3 months prior to application
  • No outstanding debts
  • No ongoing legal proceedings
  • No immovable property in the country
  • Written notice of No Objection has been given by the Commissioner of Inland Revenue

Anyone who objects to the deregistration can file an application for re-registration. This must be done with the court within 20-years from the effective deregistration date.

 

Need Help?

Let 3E Accounting handle your liquidation in Hong Kong affairs. Our expert, insightful, and professional team will handle each aspect with due diligence. Liquidate with peace of mind knowing that you’re in good hands. For more information about our services, contact our Hong Kong team today.

 

Winding-up and Liquidation in Hong Kong