A Dormant company is defined as a HK company that never commenced business or operation which is accounting related for entry. If a company do have undergone the activities as defined under s. 121 of the Companies Ordinance, it cannot be declared as dormant company provided that the expenses is the statutory charged expenses (Cap. 32, s. 344A(9))
A company may declare itself a dormant company by passing a special resolution stating that the company will be dormant (s. 344A(1)) and the directors are authorized to submit the said special resolution to the Companies Registry.
Under s. 344A(4), a declared dormant company can be exempted from the followings:-
1. (ss 107-111) to file Annual Return and hold annual general meeting
2. (ss 122-134) to main proper books, records or accounts, the preparation of profit and loss
account and the balance sheet.
If the company undergoes the business or operation which is accounting related for entry, it cannot be regarded as dormant, and the above conditions cannot be exempted.
s. 344A(6) provides that if any shareholder know or ought to know the company has such kind of business or operation which is accounting related for entry, each director of the company (including shadow director) has to be personally liable for the company’s related transactions.
If the company proposes to be declared as dormant, s. 344A(5) provides that the director of the company has to file with the Companies Registry the special resolution, declaring that the company will not commence business or operation which is accounting related for entry.