Does a dormant company file an annual return

Does a Dormant Company File an Annual Return

The answer is no, once a private company has properly declared itself dormant under the Companies Ordinance (Cap. 622), it is exempt from filing the annual return (Form NAR1) for each subsequent year of dormancy. However, the exemption does not apply to the annual return that falls due in the year the company declares dormancy if the 42-day filing period has already passed. Each case depends on the timing of the declaration.

A private company declaring itself dormant must have no significant accounting transactions during the period. A declaration of dormancy is made by a special resolution of the members, and the company must notify the Companies Registry that it has passed that resolution. Once the declaration is effective, the company's obligation to deliver an annual return to the Companies Registry ceases for as long as it remains dormant.

Hong Kong Dormant Company Filing

A dormant company in Hong Kong still has other filing obligations. It must continue to maintain its Business Registration Certificate with the Inland Revenue Department, and it must notify the registry of any change to its officers or registered office using the appropriate forms (ND2A, NR1). The company must also keep its statutory registers up to date and maintain a Significant Controllers Register.

The exemption from the annual return does not remove the requirement to file a profits tax return if the Inland Revenue Department issues one, though a dormant company with no income may apply for a nil return.

Dormant Company Annual Return Exemption

The exemption is found in the Companies Ordinance (Cap. 622). A private company that has declared itself dormant is exempt from delivering an annual return. The exemption applies only to the annual return itself; it does not remove the requirement to have audited financial statements prepared unless the company also has no significant accounting transactions, in which case the audit requirement may also be exempt.

If the company begins to trade again or engages in any significant accounting transaction, the dormancy declaration ceases to have effect, and the annual return obligation revives from that point.

NAR1 Dormant Company

When a dormant company does deliver an annual return, for example, because the dormancy was declared after the return date had passed, the company files the standard Form NAR1. The registration fee for that return is the same as for any other private company: HK$105 if filed within 42 days, with higher rates applying if it is late. The form must be completed up to the return date, showing the particulars of directors, secretary, shareholders, and registered office as at that date.

Dormant Company Compliance Hong Kong

A common misunderstanding is that a dormant company faces no compliance obligations. In reality, the company remains subject to the Companies Ordinance. It must:

• Appoint and maintain a company secretary.
• Keep a registered office in Hong Kong.
• Maintain registers of members, directors, secretaries, and charges.
• Keep accounting records for seven years.
• File changes of officers and address on time.

The only relief is from delivering the annual return itself. All other statutory filings and record-keeping duties continue.

If a dormant company fails to maintain these basic compliance requirements, it risks being struck off by the Companies Registry for not carrying on business or being in operation. Directors should ensure that even a dormant entity is properly administered and that any declaration of dormancy is correctly documented and filed.