5 Feb 2016
Deregistration of a defunct (limited liability) company
The company concerned must be a solvent private company incorporated in accordance with the Companies Ordinance, other than those companies specified in section 749(2), or registered in accordance with Part 16 of the Companies Ordinance, and meet the following requirements:
- All 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;
- The company’s assets do not consist of any immovable property situate in Hong Kong;
- If the company is a holding company, none of its subsidiary’s assets consist of any immovable property situate in Hong Kong; and
- The company has obtained a written "Notice of No Objection to a Company Being Deregistered" issued by the Commissioner of Inland Revenue.
To apply for deregistration, the applicant must submit the application to the Companies Registry together with the "Notice of No Objection" issued by the Commissioner of Inland Revenue. If the applicant has good grounds, it may apply to the court for restoration of the company within 20 years after the date of deregistration. The court may order the restoration of the deregistered company by the Companies Registry.
Either the court or the shareholders can terminate the business of a company.
Winding-up (or liquidation) initiated by the court is compulsory winding-up. The company itself, its creditors, the Registrar of Companies, the Financial Secretary, or Official Receiver may file a winding-up petition against the company. After a winding-up order has been issued, the court will appoint a liquidator, otherwise, the Official Receiver may act as provisional liquidator. If the company can pay off all its debts (i.e. it is solvent), it may wind up its business by way of members’ voluntary winding-up. If the liquidator reckons that the company cannot pay off all its debts within the timeframe specified in the Certificate of Solvency, he may change the winding-up procedure to creditors’ voluntary winding-up.
The whole procedure involves several rounds of directors’ meeting, shareholders’ meeting and creditors’ meeting in appointing a liquidator and publishing the company’s resolution and notice in the Gazette.
The Court of First Instance of the High Court of the Hong Kong Special Administrative Region (the court) may wind up a limited company under any one of the following conditions: the company is insolvent; a special resolution has been passed stipulating that the company is to be wound up by the court; the court rules that it is reasonable and fair to wind up the company. Generally speaking, once a company is ordered by the court to wind up, it will have no power to change the ownership of its assets, and the authority of managing all matters relating to the company will also be transferred from the directors or shareholders of the company to the liquidator. For detailed regulations on the winding-up of companies, please see the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap 32, Laws of Hong Kong) and the Companies (Winding-up) Rules.
If the property of a company filing for winding-up is unlikely to exceed HK$200,000 in value, the Official Receiver may apply to the court for winding up the company by way of summary procedures. If the court accepts the application, then it will order:
i. that there is no need to convene a meeting of creditors and contributories;
ii. that it is not necessary to set up a committee of inspection;
iii. the Official Receiver to act as liquidator. If the wound-up company concerned does not have sufficient funds to pay the remuneration of the liquidator, the shortfall will be paid by the government using public funds, but there is a limit to the amount payable.