Closing a company through deregistration: settle liabilities, assets and tax matters first

Before you start

Deregistration is for eligible defunct, solvent local private companies or companies limited by guarantee. Conditions include all members agreeing, no outstanding liabilities, no relevant legal proceedings and restrictions on Hong Kong immovable property, including a holding company's subsidiaries. The company must not have commenced operations or must have ceased operating for the three months immediately before applying. Obtain IRD's no-objection notice and deliver NDR1 within three months of that notice's issue.

What to do, step by step

1. Directors should inventory wages, MPF, taxes, suppliers, customer refunds and litigation before selecting the route. If liabilities cannot be settled, seek advice on the appropriate insolvency or other procedure. Do not describe an unresolved debt as zero merely because the creditor has not recently chased it.
2. Collect receivables, dispose of stock and assets properly, stop renewals and conclude contracts. Document the treatment of bank balances, deposits and pending refunds. Coordinate the bank-account closure with final payments so that outstanding credits do not become stranded during the dissolution process.
3. Apply to IRD using IR1263 and clear issued returns, enquiries and tax liabilities. Address any outstanding-matters notice before proceeding. The no-objection notice relates to tax clearance for this route; it is not the Companies Registry's final evidence that the company has dissolved.
4. Deliver NDR1 within the notice's permitted period and follow Registry correspondence and notices. Continue applicable filing duties until dissolution. Retain final company-status evidence and historical records with a named custodian, ensuring former directors can locate them when a legitimate follow-up enquiry arises.

Costs, timing, and things to check

Deregistration, statutory dormancy, striking off and winding up are different procedures. Abandoning annual filings is not a planned closure method. If a provider handles the process, require the formal documents at each stage rather than relying solely on a paid closure package.

Company property remaining at dissolution can create further problems. Before applying, review bank balances, vehicles, trade marks and group assets professionally. Do not distribute them informally to an individual founder without establishing the lawful treatment and preserving the accounting evidence.

A practical example

An online shop stops taking orders while its payment provider still holds a reserve. Directors complete refunds and settlement, address stock, IRD questions and outstanding contributions, and record the final operating date. After receiving the no-objection notice they file NDR1 in time. They continue watching annual filing obligations until the official status confirms dissolution, preserving the final settlement and closure evidence together.