Do I need a company secretary if the company is dormant

Do I Need a Company Secretary If the Company Is Dormant?

Yes. A dormant Hong Kong company must still appoint a company secretary. The statutory requirement under the Companies Ordinance (Cap. 622) applies regardless of the company's operational status. Dormancy does not remove the obligation to have a secretary in place.

Dormant Company Requirements Hong Kong

A company may declare itself dormant under the Companies Ordinance where it has no significant accounting transactions. The principal benefit of dormancy is an exemption from delivering an annual return to the Companies Registry. However, dormancy does not suspend the company's other statutory obligations. The company must still maintain a registered office, keep accounting records, maintain statutory registers, and appoint a company secretary.

Company Secretary for Dormant Company

The requirement for a company secretary is set out in the Companies Ordinance. Every Hong Kong incorporated company must have a secretary. The secretary must be a natural person ordinarily resident in Hong Kong, or a body corporate with its registered office or a place of business in Hong Kong. A dormant company is no different from an active company in this respect. If the company has only one director, that same person cannot be the sole company secretary.

Dormant Company Compliance Hong Kong

Although a dormant company is exempt from filing an annual return, it must still comply with other ongoing obligations. These include:

• Maintaining the register of members, register of directors, register of company secretaries, and register of charges.
• Keeping accounting records for seven years.
• Notifying the Companies Registry of any changes to directors, secretary, or registered office using the appropriate forms.
• Maintaining the Significant Controllers Register.

The company secretary is responsible for ensuring these compliance tasks are carried out.

Significant Controllers Register Dormant

The Significant Controllers Register has been required since 1 March 2018 for all companies incorporated in Hong Kong, including dormant companies. A significant controller generally holds more than 25% of the issued shares or voting rights, or otherwise exercises significant influence or control. The company must identify its significant controllers and record their details in the register.

The company must also designate a representative to assist law enforcement with access to the register. The designated representative must be a natural person ordinarily resident in Hong Kong, or a body corporate with a registered office or place of business in Hong Kong. The company secretary often serves as the designated representative, but the roles are separate.

The register must be kept at the registered office or another prescribed place in Hong Kong. It is not open to public inspection.

Notifying Changes

If a dormant company appoints a new company secretary, it must file Form ND2A with the Companies Registry. If the secretary's particulars change, the company files Form ND2B. If the secretary resigns, the company files Form ND4. These filings are required even though the company is dormant.

The company secretary is also responsible for maintaining the Significant Controllers Register and ensuring the designated representative is in place. If the designated representative changes, the company must update the register accordingly.

Practical Considerations

A dormant company that has no activity and no intention of resuming trading may consider deregistration as an alternative to remaining dormant. Deregistration requires a notice of no objection from the Commissioner of Inland Revenue and is available only where the company has no outstanding liabilities and all members agree.

If the company intends to remain dormant, it should ensure the company secretary is aware of the company's status and the ongoing compliance obligations. The secretary should be someone who understands the statutory requirements and can act promptly when needed.