Annual Return - Local Company Limited by Guarantee hong kong

a22162
5 hours ago
6 min read

Hong Kong Annual Return for Companies

Annual Return - Local Company Limited by Guarantee

An Annual Return for a Hong Kong company limited by guarantee is a mandatory yearly filing with the Companies Registry (CR) that provides an updated snapshot of the company's information. This is distinct from a Profits Tax Return, which is filed with the Inland Revenue Department (IRD).

Key Requirements & Deadlines

A local company limited by guarantee must file its annual return with the Companies Registry. Here's what you need to know:

Filing Form: The required form is Form NAR1.
Deadline: The annual return must be filed within 42 days after the company's "return date." For a company limited by guarantee, the return date is 9 months after the end of its accounting reference period (the financial year-end date). It is a criminal offence to fail to deliver the annual return on time, and the CR has no power to extend this statutory time limit.
Required Documents: In addition to Form NAR1, companies limited by guarantee must also submit certified true copies of their financial statements, including the director's and auditor's reports.
Filing Fee: The standard registration fee is HK$105 if filed on time. Late filing results in significantly higher fees that escalate the longer the return is overdue.

Information Required

The annual return (Form NAR1) provides an update on the company's particulars as of the return date. This includes:

Company particulars: Name, registration number, and registered office address.
Details of officers: Names and addresses of all directors and the company secretary.
Accounting reference period: The period for which the company's financial statements are prepared.

Filing Methods

You can file the annual return in one of two ways:

Electronic Filing: Submit the required forms and supporting documents through the Companies Registry's e-Services Portal. This is the recommended method for its efficiency and convenience.
Hard Copy Filing: Submit the completed forms, along with certified copies of the financial statements, in person or by post to the Companies Registry.

Timely and accurate filing is crucial for maintaining compliance and a company's good standing in Hong Kong.

Bestar Professional Fees

Here's a breakdown of the costs and what they cover:

1. Annual Retainer for Company Secretarial Services

This is the most common fee structure for a professional firm. The annual retainer covers the routine, recurring compliance tasks required by the Companies Ordinance. The cost can range from HK$1,200 to HK$8,000+ per year, depending on the scope of services.

An annual retainer includes:

Acting as the Company Secretary: A company limited by guarantee must have a company secretary who is a natural person ordinarily resident in Hong Kong, or a body corporate that has its registered office or place of business in Hong Kong.
Preparation and filing of the Annual Return (Form NAR1): This includes the professional's time and expertise to complete the form, but it does not include the government filing fee (which is a separate cost of HK$105 if filed on time).
Maintenance of statutory records: This includes keeping the company's registers of directors, members, and minutes of meetings up to date.
Advising on general compliance matters: Providing guidance on legal and regulatory requirements.

2. Fees for Financial Statements and Audit

Companies limited by guarantee are required to have their financial statements audited annually. This is often the most significant professional cost.

Bookkeeping and Accounting: If your company does not have internal accounting staff, Bestar will charge for bookkeeping services to prepare the financial statements. This cost is highly dependent on the volume of transactions and the complexity of the company's financial activities. For a small organization, this could range from HK$3,500 to over HK$10,000 annually.
Statutory Audit: The audit fee is determined by factors such as the company's revenue, the number of transactions, and the complexity of its operations. The fee for a basic, small-scale audit for a non-profit could start from HK$8,000 and go up significantly based on the scope.

3. General Compliance Advice

While some general advice is included in the annual retainer, more complex legal or financial issues may be charged on a project basis or an hourly rate. This can include services like:

Drafting or amending the Articles of Association: For example, to meet the requirements for a tax exemption application.
Changing company particulars: Fees for ad-hoc services like appointing or removing a director, or changing the company name.
Applying for Section 88 tax exemption: If the organization is a charity, a professional firm can handle the application to the Inland Revenue Department, which is a separate service with its own fee.

Key Takeaway on Costs

To get an accurate estimate, it's essential to define your organization's specific needs. The total annual cost for Bestar to handle all compliance requirements for a small company limited by guarantee (including the company secretary, financial statement preparation, and audit) could easily be in the range of HK$15,000 to HK$30,000 or more, not including the government filing fees.

For an exact quote, you should contact Bestar in Hong Kong and provide us with details about your organization's size, activities, and specific requirements.

How Bestar can Help

Bestar can be an invaluable partner for a company limited by guarantee in Hong Kong, especially for managing its annual compliance obligations. The legal and financial landscape can be complex, and a single mistake can lead to significant penalties, legal issues, or damage to the organization's reputation.

Here's how Bestar can help with the various aspects of annual compliance:

1. Preparation and Filing of the Annual Return (Form NAR1)

The annual return is a critical, time-sensitive document. Bestar ensures this is handled with precision.

Timely Submission: The most immediate benefit is avoiding late filing. Bestar tracks your company's return date and ensure the Form NAR1 is submitted within the 42-day deadline, thereby helping you avoid escalating government penalties.
Accuracy of Information: Bestar will ensure all the company's particulars—such as director and company secretary details, registered office address, and accounting reference period—are accurate and up-to-date. This prevents rejections from the Companies Registry due to errors.
Correct Forms and Procedures: We are knowledgeable about the latest forms and filing procedures, whether it's an electronic submission via the e-Registry or a hard copy filing.

2. Preparation of Financial Statements and Audit

For companies limited by guarantee, the requirement to file audited financial statements with the annual return adds a layer of complexity. Professional firms offer essential services in this area.

Bookkeeping and Accounting: If your organization lacks an in-house accounting team, Bestar can handle all your bookkeeping needs, ensuring all financial transactions are properly recorded in compliance with Hong Kong Financial Reporting Standards.
Audit Services: Auditors, who are certified public accountants (CPAs), provide an independent review of your financial statements. This is a mandatory requirement. Bestar will prepare the documents for the audit and coordinate with the auditor to ensure the process is smooth and the reports are completed on time for filing with the NAR1.

3. Maintenance of Statutory Records

Companies must maintain a range of legal records, known as "statutory records," at their registered office.

Register of Directors and Members: Bestar will ensure that these registers are accurately updated with any changes in directorship or membership.
Minutes of Meetings: We can assist in preparing and maintaining minutes of board and general meetings, which are a required record of company decisions.

4. General Compliance Advice

Beyond the routine filings, Bestar provides valuable advisory services.

Advising on the Companies Ordinance: We have an in-depth understanding of the Companies Ordinance (Cap. 622) and other relevant regulations. This expertise is crucial for ensuring the company remains compliant with all legal requirements.
Guidance on Corporate Governance: Bestar can provide advice on best practices for corporate governance, which is especially important for non-profit and charitable organizations to maintain transparency and public trust.
Handling ad-hoc changes: Bestar can also assist with specific corporate actions, such as changing the company name, updating the registered office address, or appointing new directors, and ensuring the necessary forms are filed with the Companies Registry.

By outsourcing these functions, the company's directors and management can focus on their core mission and activities, confident that their legal and financial compliance obligations are being handled accurately and on time. The cost of these services is often seen as an investment that protects the organization from potentially far greater fines and legal fees that can arise from non-compliance.

Request for Proposal