What if the business plan doesn’t work out?
Starting a business in Hong Kong is an exciting experience. However, if the business plan does not work out, one of the simplest ways to close a company is to initiate the deregistration process. The application has to be approved by both the Inland Revenue Department and the Companies Registry. Once the Inland Revenue Department issues the “no objection notice” to the close down application, the Companies Registry will then publish a close down notice in the Gazette. From our experience, it usually takes around 6 months to close a company in Hong Kong. If you require assistance, please contact our incorporation expert at firstname.lastname@example.org
Effect of Dormancy
The dormancy procedure only has about 25-year history in Hong Kong. Section 5 of the Companies Ordinance governs. dormancy procedure and it only enables certain qualified Hong Kong companies to become dormant (i.e. inactive). In general, being dormant means that the company is exempt from its obligation to prepare financial statements, appointing auditor, and publishing financial records and statement.
Procedure to be Dormant
Before a Hong Kong Company can declare being dormant, it must pass and deliver a resolution to the Companies Registry as per section 5(2). If the company wants to cease its dormant status, the company has to pass a special resolution to declare its intention to enter into accounting transaction and the resolution has to be delivered for registration in time.
As an important reminder, even a company can be inactive, a dormant Hong Kong company still have to comply with some minimal formalities and regulations. For details, please contact our Hong Kong company formation team at email@example.com