Should I make my company dormant or deregister it (NDR1)?
Dormancy keeps the company alive but pauses audit and some filings; deregistration (Form NDR1) removes it from the register. If the business is finished for good and the conditions are met, deregistration ends the yearly obligations for good.
Dormant (s.5)
- The company continues to exist and can restart later.
- Audit, AGM and annual return duties are paused while dormant.
- Any accounting transaction ends dormancy and brings personal liability for those debts.
Deregistration by NDR1 (defunct solvent company) The Registry's pamphlet gives these conditions:
- All members agree.
- The company has not started business, or has not operated or carried on business in the three months immediately before the application.
- It has no outstanding liabilities (the pamphlet lists the full set of conditions).
- The Commissioner of Inland Revenue has issued a Notice of No Objection.
The application is made within three months of the date of the notice, using Form NDR1 and a non-refundable fee (HK$420 on the Registry's forms list).
Which to choose
- Planning to restart soon: dormancy.
- Finished for good and nothing owed: deregistration.
- Not sure of your liabilities or unpaid tax: speak to a professional first.
Audit link Until the company is either dormant or removed from the register, the audit duty continues each financial year. The IRD issues its Notice of No Objection only if, among other conditions, the business has ceased and will not resume, there are no outstanding tax liabilities and the returns it has issued have been submitted. It does not accept unaudited accounts to support a return unless the company is dormant under s.5.
Legal basis
- Companies Ordinance (Cap. 622), s.5
- Companies Ordinance (Cap. 622), s.750
Sources
Applies to 2026 · Last reviewed 29 October 2026
General information for business owners, not legal, tax or professional advice. Rules change, so check the sources or ask a licensed professional before you act.
Related questions
- What is the dormant company audit exemption in Hong Kong?A qualifying private company that has become dormant under s.5 of the Companies Ordinance does not need to appoint an auditor or have its accounts audited while it stays dormant. The exemption is in s.447, not in s.448, which deals with false statements in reports.
- How do I make my Hong Kong company dormant to avoid the audit?Check the company qualifies, pass a special resolution declaring it will become dormant from a stated date, and have the directors deliver that resolution to the Companies Registrar. Dormancy takes effect from the delivery date or the later date in the resolution.
- What ends a Hong Kong company's dormant status, and what are the risks?A company stops being dormant if it passes and delivers a special resolution saying it intends to transact, or if it actually enters an accounting transaction. From then on the audit duty returns, and directors and knowing members are personally liable for debts from that transaction.
- Does a dormant Hong Kong company still have to file a profits tax return?Dormancy under the Companies Ordinance relieves the company from audited accounts, and IRD accepts a profits tax return from it without the audited statements. It does not by itself cancel the duty to file a return when IRD issues one.
- Does every Hong Kong limited company need an audit?Yes. Every Hong Kong company must have an auditor for each financial year and its financial statements audited, whatever its size or whether it trades. The only company that escapes is a qualifying private company that has validly become dormant under s.5 and s.447 of the Companies Ordinance.