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NEWS AND RESOURCES

13 February 2014

DORMANT COMPANY
Dormant Company is a term that describes a company that is not active, trading or carrying on business activity. A dormant company may include the following:-

• ​a new company that's not yet carrying on business
• ​an 'off-the-shelf' or 'shell' company held by a company intending to be sold
• an existing company that has been - but is not currently – carrying on business​
• a company that's no longer carrying on business and destined to be removed from the Companies Register​

A company may pass a special resolution and deliver such resolution to the Companies Registrar for official registration as a dormant company.

EXEMPTIONS AVAILABLE
If the company is dormant, the following exemptions are available:-

1. to deliver annual return
2. to hold annual general meeting
3. appointment of auditor and preparation of auditor's report
4. to prepare financial statements and directors' report
5. ​laying and publication of financial statements and reports and summary financial reports

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CEASING TO BE A DORMANT COMPANY
If a dormant company intends to enter into a relevant accounting transaction by the Company, it may cease to be a dormant company and exemptions mentioned above will no longer apply. The New Companies Ordinance require at least one director who is a natural person, whereby restricting the use of corporate directorship.  However, a company deemed to be a dormant company under the predecessor ordinance is exempt from compliance with this requirement.  For more information, please also visit here.

RECOMMENDATIONS
ALCPA recommend all companies to amend the structure before the New Conmpanies Ordinance takes effect and we are able to assist in keeping your structure compliant during the transitional period and for subsequent periods.  For more information, contact us today to find out more.

For more updates on the New Companies Ordinance, please also visit here.