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Author Renee YangRenee Yang

6 min read
Incorporation

Annual Return Filing Dates To Take Note of for New Business Owners

Annual Return Filing Dates To Take Note of for New Business Owners

New business owners or even company officers may not be familiar with the necessary paperwork to deliver to local authorities for annual requirements. Everything is new. Starting a business in Hong Kong is already so tough and now there is paperwork to deliver to be compliant?

Common questions will come up from business owners, like, what kind of requirements do they need to comply with, what are the deadlines and what are the consequences if I can’t deliver it on time? In this comprehensive guide, we will share the list of compliance and annual filing requirements for private limited and listed companies no matter if you’re a new or seasoned business owner.

Checklist of Compliance Requirements for Private Limited Companies

Before you file your annual returns, make sure that you are complying with these on-going requirements for private limited companies.

You will need to:

  1. Maintain a local registered address. Take note that P.O box is not allowed.
  2. Maintain a local company secretary. The secretary can be an individual or an entity.
  3. Maintain a local director. This person can be a local or a foreigner. However, he or she must be above 18 years of age.
  4. Maintain at least a shareholder. This may come in the form of an individual or an entity. If the shareholder is an individual, he or she must be 18 years and above.
  5. Hold an Annual General Meeting (AGM).
  6. Maintain proper records and documents. This includes a business registration certificate, Articles of Association and Minutes of Meeting.
  7. Maintain accurate and detailed accounting records. This includes the following: receipts, payments or income and expenditure, invoices, bank statements and daily record of money received. All these records must be kept for 7 years from the transaction date.

Things Change

If you need to change your registered address for your company, read our guide.

  • Your registered address
  • Particulars of your local director, company secretary and shareholder
  • Relocation of company statutory books
  • Any allotment or issue of new shares
  • Passing new resolution or certain other resolutions

Any changes to the above must be done within 15 days from the date of appointment or date of change.

What Is the Annual General Meeting?

Holding an Annual General Meeting (AGM) within 18 months from the date of incorporation is mandatory. After that, it needs to be held once every calendar year but not exceeding 15 months from your last AGM. We understand some companies might operate with a single employee in the beginning stage. In such instances, they are exempted from holding an AGM under the new Company Ordinance’s regulations.

If all these details are too much for you to remember, you can always consult our experienced company secretaries to make sure your company stays compliant.

Mr Yuen set up his new IT company in Hong Kong on 15 May 2019. He slowly built his business by hiring local staff and getting foreign investors in the next few months. His first AGM was finally held on 17 July 2020. Though one year has passed, his first AGM is still held within the 18 months’ time frame.

What Should Be Presented During the AGM?

During the meeting, it is fairly important for the company director to present an up-to-date financial report as a way to assess the company’s financial health. Your financial report must be presented in compliance with Hong Kong Financial Reporting Standards (HKFRS).

What Are the Annual Filing Requirements?

Need more details?

Read more on our Quick Guide to Annual Returns in Hong Kong.

Local private limited companies and non-Hong Kong registered companies are subject to annual filing requirements. That means, companies are required to file with the Inland Revenue Department (IRD) and Companies Registry (CR). Both authorities function differently when it comes to annual filing.

For Companies Registry, company officers are responsible to file an annual return once it has been signed by director, company secretary or authorised representative with the Company Registry. An annual return is a form that contains general information about the company such as the address of registered office, shareholders, directors and company secretary.

For the Inland Revenue Department, companies under Hong Kong company law are required to file an Annual Tax Return, which is also known as Profits Tax Return, together with audited accounts to IRD.

What Is Required for an Annual Tax Return?

IRD will normally issue a Tax Return notification to companies on 1 April every year. For newly incorporated companies, notification will be sent on the 18th month of the incorporation date.

Once companies receive such notification, it is important that they file their tax return within 1 month from the date of notification.

You will need to attach the following supporting documents:

  1. Company’s balance sheet;
  2. Auditor’s report;
  3. Profit & Loss Account relating to the basis period;
  4. Tax computation indicating how the amount of assessable of profits is derived at

For Listed Companies, What Are Some of the Compliance and Requirements?

Aside from submitting Form NAR1, listed companies are required to deliver certified true copies of the company’s financial statements such as directors’ reports and auditors’ reports together with Form NAR1.

The annual return’s deadline will depend on the commencement of your company’s financial year. Under the new Companies Ordinance (Cap. 622), if the date is before 3 March 2014, you must complete your annual return within 42 days after your company’s Annual General Meeting. After which, you will need to forward your annual return to the Registrar of Companies.

Likewise, if the date is on or after 3 March 2014, you must deliver an annual return every financial year to the Registrar of Companies for registration within 42 days after the company’s return date. This return date must be 6 months after the end of the company’s accounting reference period.

So what exactly is an accounting reference period? It refers to the period where the company’s annual financial statements are being prepared.

Mr Wong is the company director of Frost Wellness International Co, a public listed company in Hong Kong. Other than submitting Form NAR1, he needs to prepare a director’s report. His company’s finance department has to prepare the annual financial statements. Last year, the annual finance statements were completed on 1 August 2020. As such, his company secretary will only proceed to file an annual return from 1 February 2021 onwards.

When Do I Need To File My Annual Returns?

As a private limited company, you must file your annual return every year with the Registrar of Companies for registration within 42 days after the date of your company’s incorporation.

Alex owns a small Superfood distribution company in Wan Chai. His company was incorporated on 1 May 2018. Each year, he will file his annual return on 31 May.

Will There Be Any Extension for the Deadline if I’m Unable To File My Annual Return on Time?

It is common for business owners to miss the deadline due to busyness. Unfortunately, there will be no extension given for the deadline if you are unable to file your annual return on time.

What Is the Annual Filing Penalty?

Failure to file your annual return late will result in paying high registration fees. Here are the fees chargeable:

If the Annual Return is file: Amount
More than 42 days after but within 3 months after the company’s return date HK$870
More than 3 months after but within 6 months after the company’s return date HK$1,740
More than 6 months after but within 9 months after the company’s return date HK$2,610
More than 9 months after the company’s return date HK$3,480

However, if the company refuses to comply with the above requirements, the director and the person in charge are liable for further penalties such as prosecution and default fines. The maximum penalty is HK$50,000 for each breach. For any continuing offence, a daily default fine of HK$1,000 will be imposed.

How Does the Hong Kong Government Help Companies To Comply With the Annual Filing Requirements?

We understand that some companies might find it challenging to keep up with the various deadlines given. To promote compliance among companies, the Registrar of Companies has implemented a compliance programme. This information pamphlet will equip company officers with knowledge about procedures and general filing requirements. It’s available at the Publications – Information Pamphlets section of the Companies Registry’s website.

For new companies, a copy of the information pamphlet on ‘Compliance with the Companies Ordinance and Business Registration Ordinance’ will be issued together with the company’s Certificate of Incorporation.

Conclusion

Hong Kong company law takes annual filing seriously. It is the director and company officers’ responsibility to ensure that their companies are complying with the on-going statutory obligations. Annual returns that are supplied with incomplete information, not properly signed or not accompanied with correct registration fee will be considered as unsatisfactory. As a result, it may lead to heavy penalties such as fines and prosecution.

However, you don’t have to go through all these worries. Approach our Corporate Secretaries in Hong Kong, and we will gladly assist with the important deadlines and necessary paperwork, while you focus on the running of your business.

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