Dormant companies in Hong Kong: status, exemptions and ongoing obligations.

A company that has stopped trading is not automatically dormant under the Companies Ordinance. Formal dormant status has specific conditions and exemptions, while other obligations may continue.

Formal status and effective date

An eligible private company can pass and deliver a special resolution under section 5 of the Companies Ordinance. Dormant status begins on delivery to the Registrar or a later date specified in the resolution. Eligibility restrictions must be checked; inactivity alone does not create the status.

Exemptions and their timing

Section 447 provides relief from specified financial-reporting provisions during dormancy. Section 663 concerns annual returns. The dates matter: if dormancy starts after the 42nd day following the relevant anniversary, that year’s annual return may still be due. Check the complete position for the period rather than applying an exemption retrospectively.

Transactions that end the status

The statutory definition concerns transactions required to be entered in accounting records, excluding transactions arising from fees required by an Ordinance. A dormant company can cease to be dormant by the relevant resolution or by entering an accounting transaction. Review proposed payments and receipts before acting; not every small transaction is harmless.

Obligations that remain

Registered-office, director and company-secretary changes still need the relevant notifications. Review business registration and tax requirements separately. A profits tax return issued by the IRD must be addressed; dormant status does not automatically establish a particular nil-return treatment.

Compare keeping the company dormant with deregistration using its assets, liabilities, future use and actual ongoing costs. There is no universal one-year threshold for the decision. IMSG can coordinate the agreed company and tax work after the circumstances are reviewed.