Dormant Hong Kong Company

What is “dormant” status?

l   Dormant means the company does not have any important accounting transaction in a particular accounting year. Important accounting transaction means a transaction that is required by section 373 to be entered in the company’s accounting records, excluding a transaction arising from the payment of any fee that the company is required by an Ordinance to pay.

Who can apply to declare the company dormant?

l   Only private company can apply dormant status.

What document should a company deliver to Companies Registry to declare the company dormant?

l   According to section 5 of the Companies Ordinance, a private company may pass and deliver to the Registrar of Companies for registration a special resolution* (specimen in pdf Format) declaring that the company will become dormant

*Special resolution: http://www.cr.gov.hk/en/access/docs/declare-e.pdf

When will a company become dormant?

l   If a company passes a special resolution (specimen in pdf Format) declaring that the company will become dormant, the company is dormant from:

(i) the date of delivery of the special resolution to Hong Kong Companies Registry; or

(ii) any later date that is specified in the special resolution.

 

After the anniversary date of my company this year, I delivered a special resolution declaring that my company would become dormant as from the date of delivery of the special resolution to Companies Registry. Do I need to deliver the annual return for this year for registration?

l   Yes, under section 663 of the Companies Ordinance, a dormant company is not required to deliver annual return for registration. However, a private company is still required to deliver an annual return for the year if the effective date on which the company becomes dormant falls after the 42nd day after the anniversary of its date of incorporation.

l   The same applies to Business Registration Certificate: if the company applies for dormant status and the effective date of it falls after 1 month of the anniversary of its date of incorporation, the company will have to be renewed.

If a dormant company enters into an accounting transaction, will the company still be exempted from the delivery of annual return?

l   No, if a dormant company enters into an accounting transaction, the Hong Kong company ceases to be a dormant company. The exemption from delivery of annual return ceases to have effect on and after the date of the accounting transaction.