Dormant company in that the HK is defined as a business that has had no significant accounting transactions during its fiscal year. It is not sufficient that the corporation might not have traded if the firm has any accounting transactions whatsoever with the exception of three particular transactions that are permitted. Transactions regarded as allowable for the company to maintain its inactive company standing is the total received by the business in respect of the initial stocks issued to the memorandum of association contributors, the yearly filing fee payable to employers dwelling and penalties and fines issued by companies dwelling for non filing of the annual return.
The distinction being that a non trading company might still have other financial transactions entered into its accounting records that although not related t trading could disqualify that business as a dormant company and the particular rules applicable to a dormant company. A company may be in a dormant state for several reasons like holding documents or assets or simply protecting a trading name and plans to submit annual return hong kong.
There is no limit on how long a company can stay dormant however there are procedures which must be followed to prevent penalties and keep the business on the companies house register. Every dormant company needs to maintain at least two officers, a director and company secretary. The directors are Responsible for ensuring that the dormant company submits the annual return, form 363, each year which contains details of the directors, company secretary, registered office and shareholders. The companies house filing fee of thirty pounds that is reduced to fifteen pounds when the internet filing service is used to submit the return online.
In addition the Directors are also responsible for submitting to company’s house a set of financial accounts every year. Failure to submit a set of accounts may lead to company’s house striking off the business from the business register and would leave the supervisors open to penalty penalties and a possible criminal prosecution. If the dormant company is no longer required that the directors can arrange for the company to be dissolved by one of two methods determined by whether the business has outstanding financial affairs. If the company has no obligations then it could have the ability to apply to firm’s house to get a voluntary striking off and dissolution. If the income tax business has outstanding financial affairs then the voluntary liquidation procedures will need to be followed. The annual accounts a dormant company must submit to company’s house annually include a balance sheet that also includes statutory notes in compliance with the companies act. For a private company the yearly accounts have to be delivered within 10 months of the fiscal year end, commonly known as the accounting reference date and registered annually thereafter even if the business has never traded.