In Hong Kong, a public company or company limited by guarantee is required to file an annual return for registration within a certain period of time. Failure to file on time can result in high fines and other consequences. This article will explain when you need to file your annual return, the consequences if you fail to file on time and what documents you need to submit. If you are the owner or manager of a public company or company limited by guarantee, this article will be of help to you.
Under what circumstances does a public company or company limited by guarantee need to file an annual return?
Company commenced operations before 3 March 2014.
For publicly listed companies or companies limited by guarantee, they are required to submit an annual return to the Registrar for registration within a certain time limit. If a company’s financial year commences before 3 March 2014, it is required to file Form NAR1 and comply with the previous version of section 109 of the Companies Ordinance within 42 days of the annual general meeting each year.
Where a company commences operations after 3 March 2014.
And if the company’s financial year commences on or after 3 March 2014, it needs to file Form NAR1 and comply with section 662 of the CO within 42 days after the company’s return date. The filing date for public companies is the expiry date of 6 months after the end of the company’s accounting reference period, while the filing date for companies limited by guarantee is the expiry date of 9 months after the end of the company’s accounting reference period.
It is important to note that the accounting reference period is the reference date for the preparation of the company’s annual financial statements.
What are the consequences if an annual return is not filed on time?
A local public company or company limited by guarantee 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 public company or company limited by guarantee is found guilty, the company and the responsible person will face 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 a higher registration fee?
If a company fails to file its annual return on time, it will be required to pay a higher registration fee.
The fee for a company limited by guarantee to deliver an annual return (in accordance with section 662) is between HK$870 and HK$3,480.
For public companies, the fees range from HK$1,200 to HK$4,800.
This fee is calculated according to the date of filing of the annual return. If an annual return is submitted by post and the Registrar does not receive it, it will not be deemed to have been submitted to the Registrar. The annual registration fee will be 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 public companies or companies limited by guarantee and their officers are obliged to comply 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?) For example, 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?
Please submit the following registration documents.
(a) A duly completed and signed copy of the Annual Return (Form NAR1).
(b) A certified copy of the company’s financial statements, including the auditor’s report and the directors’ report.
The above information is provided for information purposes only. If you have any queries or information on 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.