Late Annual Return: Remedy, Penalties and Prosecution

At a glance

The point most often misread: “filing it fixes everything” is wrong. The higher registration fee and prosecution are two separate things — filing only stops the late clock. In serious or continuing defaults, the company and its directors can still be prosecuted, and a conviction leaves a criminal record.

Can it still be filed late?

It can, and it should go in immediately. The company can still deliver the annual return — it is not refused for being out of time; it simply attracts a higher registration fee according to how late it is. Dragging it out achieves only two things: more money, and more chance of prosecution.

Be clear on this too: the Registrar of Companies has no power to reduce the higher registration fee prescribed by the Companies (Fees) Regulation, and no power to extend the statutory period. Writing in to explain that the company had no business changes nothing. The only variable you control is when you file — and that alone decides whether you land on the HK$870 tier or the HK$3,480 one.

How to complete it and what to prepare: completing NAR1 field by field.

How exactly are the “42 days” counted?

From the anniversary, in that year, of the date the company was incorporated. Not from the year end, not from the financial year, and not from receiving any letter.

Two details to remember. First, Sundays and public holidays are included — they are not taken out. Second, if day 42 lands on a Sunday, a public holiday, a gale warning day or a black rainstorm warning day, the due date moves to the next day; but a Saturday does not extend it. Plenty of people assume Saturday works like Sunday, and a single day’s slip drops them onto the HK$870 tier.

If counting yourself feels error-prone, the Companies Registry’s website has a delivery deadline calculator — enter the details and it works the date out.

Once it is filed, is that the end of it?

No — and this is the expensive misunderstanding. Filing the annual return late does not remove criminal liability: even after the event, in serious or continuing defaults, the company and its responsible persons (including every director) can still be prosecuted, and a conviction leaves a criminal record.

Under s.662 of the Companies Ordinance (Cap. 622), the company and each of its responsible persons — every director, the company secretary and any manager — can be prosecuted. On conviction, the fine is up to HK$50,000 for each default, with a further HK$1,000 per day for a continuing default.

Note the words “every responsible person”: it is not the company alone that bears it — directors are prosecuted in a personal capacity. Nominee directorships, companies set up jointly with friends, dormant companies left untouched for years — when it goes wrong, it is counted person by person. Nor is this merely theoretical: the Companies Registry’s website carries a “Summary of Prosecution Cases” page setting out cases that have been prosecuted.

A summons has arrived — what does the process look like?

At this point it has stopped being an administrative fee and become a criminal proceeding.

The usual sequence: confirm the court, date and time on the summons, and attend — non-attendance only makes it worse. Get the return filed before the hearing if at all possible; “already filed” is the most concrete point available in mitigation. At the hearing, plead guilty or not guilty to the charge, and the magistrate considers the circumstances and the remedial action taken before deciding.

Offences dealt with in the magistrates’ courts generally carry a maximum fine of HK$50,000 unless another ordinance provides otherwise. What is actually imposed depends on the case — the “standard amounts” circulating online should not be taken at face value.

One practical point: do not assume a payment notice will arrive later. The amount and the payment deadline are as announced by the court on the day and as set out in the decision — before leaving the court, ask the clerk exactly when to pay, where to pay, and whether it can be paid electronically.

Cannot afford it in one go — can time or instalments be arranged?

You can ask, and you should ask in court. The deadline for paying a fine can be extended, and an individual magistrate can also order payment by instalments and specify the extended payment dates; fines can be paid electronically through the Judiciary’s Integrated Court Case Management System. If the amount strains cash flow, do not simply absorb it — say so to the magistrate and make the request as soon as the decision is given.

If the reason you missed it was confusing the annual return with the tax return, read annual return vs profits tax return as well.

Already late and want it over with?

Being late has one advantage: the remedy is obvious — file as soon as possible. Every threshold you pass jumps the figure a tier, and the longer it runs the closer prosecution gets.

AIcountant is a licensed Hong Kong TCSP, and we handle backlogs of a year or two regularly — checking the Registry’s file, catching up unreported director and shareholding changes, working out which fee tier applies, filing everything at once, and then filing on time every year afterwards. For the system as a whole, see the annual return NAR1 guide.

Several years behind and not sure how to close it out? Talk to us, or get started.

This is general information. Delivery deadlines, registration fees and penalties are as published by the Companies Registry (cr.gov.hk) and set out in the Companies Ordinance (Cap. 622); government fees are adjusted from time to time and the current official fee table governs. Court procedure and the penalty actually imposed depend on the case and on the Judiciary’s arrangements and the court’s decision. This does not constitute legal advice; if a summons has been issued or prosecution is involved, consult a professional.