Do I still need an audit if my company had no revenue or no business activity?
Yes, unless the company has formally become dormant. Having no sales does not make a company dormant in law. If it had any expenses, bank charges or other recorded transactions, the audit duty continues for that year.
Zero revenue does not remove the audit requirement. The Companies Ordinance requires an auditor for every financial year (s.394), and the only audit exemption is for a company that is dormant under s.5.
Why "no business" is not enough A company is dormant for audit purposes only if its members pass a special resolution declaring dormancy and the resolution is delivered to the Registrar. In addition, a company stops being dormant when it enters an "accounting transaction", meaning a transaction that must be recorded in its accounting records (paying a fee that the law requires the company to pay does not count). Ordinary running costs such as accounting fees, rent or bank charges are recorded transactions.
Practical effect
- A trading company with a quiet year: audited as normal, usually a simpler and quicker audit.
- An inactive company that never made the dormancy filing: still audited.
- A company that has genuinely done nothing and files for dormancy first: exempt from audit while dormant, but members and directors carry personal liability if it later transacts (see the dormant-company answers).
Tax side IRD's circular asks for audited statements with the profits tax return in all cases with gross income, except dormant companies. A company with no gross income is therefore treated differently at the tax return stage, but this does not change the Companies Ordinance duty.
Legal basis
- Companies Ordinance (Cap. 622), s.2 (accounting transaction)
- Companies Ordinance (Cap. 622), s.5
- Companies Ordinance (Cap. 622), s.394
- Companies Ordinance (Cap. 622), s.447
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
- 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.
- My company is loss-making. Do I still need to audit it?Yes. Profit or loss has no bearing on the audit requirement. A loss-making company is audited every year, and the auditor will also look closely at going concern.
- What does a statutory audit involve, step by step?The auditor accepts the engagement, plans around risks, tests balances and transactions with evidence, obtains third-party confirmations, reviews events after year-end, agrees adjustments, obtains a management representation letter and issues a signed report. The directors approve the accounts.
- What is going concern in an audit and what happens if there is doubt?Going concern means the company can keep operating for the foreseeable future. Management assesses it and the auditor tests that assessment, covering at least twelve months from the date of the financial statements. Doubt must be disclosed, and the auditor's report may draw attention to it or be modified.
- What are the directors' responsibilities for the accounts, and the auditor's?Directors prepare, approve and sign the financial statements and directors' report and must keep proper accounting records. The auditor forms and reports an independent opinion. Audit does not shift the directors' responsibility to the auditor.