Avoid high fines! Private companies need to understand the requirements and fees for filing annual returns
Local private companies are required by the Companies Ordinance to submit annual returns for registration within a certain period of time to ensure their legitimacy and validity, and failure to do so can result in high fines and prosecution. This makes you wonder: what are the consequences for companies that fail to file their annual returns? How much does it cost to register? How can I avoid fines? Knowing this information will help you to improve your company’s compliance and risk management skills.
Under what circumstances does a private company need to file an annual return?
For local private companies, an annual return needs to be filed with the Registrar of Companies for registration within 42 days (with a specific time limit) from the date of its incorporation. It is important to note that inactive companies are not required to comply with the requirement to file an annual return. At the time of registration, companies should ensure that the information provided on the form is correct to ensure its legality and validity.
What are the consequences if an annual return is not submitted on time?
A private company may face a number of consequences if it does not file its annual return for registration within the specified time. Firstly, the company will have to pay high registration fees and the company and each responsible person may be prosecuted.
If a local private company is found guilty, the company and the responsible person will be liable to a default fine of up to HK$50,000 per occasion and a daily fine of HK$1,000 if the default continues.
What is the actual cost? What is a “higher registration fee”?
If a private company is late in filing its annual return, it will have to pay a higher registration fee ranging from HK$870 to HK$3,480. This incremental fee is calculated based on the date of filing of the annual return.
If a private company files an annual return by post, the document will not be deemed to have been delivered to the Registrar in compliance with the filing requirements if the document is not received by the Registrar. The annual registration fee payable is also calculated based on the date of re-filing of the annual return.
Will the company receive a reminder letter to submit the annual return to the Registrar for registration?
The answer is no. As private companies and their officers are responsible for complying with the requirements of the Companies Ordinance, they must make their own arrangements to submit their annual returns to the Registrar for registration within the prescribed time limit.
However, the e-Registrar website offers the Annual Return e-Alert service (see the following article for a tutorial: Making the most of the e-Registrar tool: Annual Return e-Alert service?) In addition, registered users can receive an electronic notification reminding them to file an annual return on the annual anniversary of the incorporation of their local private company.
What documents do I need to submit?
Private companies can use the NAR1 form to submit an annual return for registration. You can download the specified form (Form NAR1) from the Companies Registry or obtain the specified form in person at 14/F, Central Government Offices.
The above information is for reference only. If you have any queries or information about filing tax returns (personal tax returns, corporate tax returns, accountant tax returns), you are welcome to contact our professional advisors and we will provide you with a free quotation and consultation service in due course.
