Accounts, Financial Statements and Audit in Hong Kong-Company Formation_Trademark Registration_Tax Service - Hong Kong CPA

FAQ

Hot Labels

Service Scope KAIZEN CPA provides Audit , Accounting, Tax Advisory, Hong Kong Company Formation, Offshore Company Registration, China Company Formation, Trademark Registration, Tax Service.

Auditing - Hong Kong

Question

Accounts, Financial Statements and Audit in Hong Kong (5)

Answer

(II) “Reporting Exemption” in Hong Kong Companies Ordinance

Q：

What are the qualifying criteria for “reporting exemption” in Companies Ordinance?

A：

A company must not be one of the following types of companies to qualify for “reporting exemption” in Companies Ordinance:

(a)	a company carries on banking business and holds a valid banking licence granted under the Banking Ordinance (Cap. 155);
(b)	a corporation licensed under Part V of the Securities and Futures Ordinance (Cap. 571) to carry on a business in any regulated activity within the meaning of that Ordinance;
(c)	a company carries on any insurance business otherwise than solely as an agent; or
(d)	a company accepts by way of trade or business (other than banking business), loans of money at interest or repayable at a premium, otherwise than on terms involving the issue of debentures or other securities.

The company should further meet one of the following criteria to qualify for “reporting exemption” in Companies Ordinance:

(a)	a small private company / holding company of a group of small private companies which meets two of the following conditions in a financial year (sections 359 (1)(a), 359(2), 361, 364 and Schedule 3 sections 1(1), (7) and (8)):
	(i)	total revenue / aggregate total revenue not exceeding HK$100 million
	(ii)	total assets / aggregate total assets not exceeding HK$100 million
	(iii)	employees / aggregate number of employees not exceeding 100;
(b)	other private company (not being a member of a corporate group) with unanimous members’ written agreement (section 359(1)(b) and deliver to the Registrar of Companies for registration within 15 days after it is passed (sections 622(1) and 622(2));
(c)	a small guarantee company / holding company of a group of small guarantee companies with total revenue / aggregate total revenue not exceeding HK$25 million in a financial year (sections 359(1)(a), 359(3), 363, 366 and Schedule 3 sections 1(5), (12A) and (13));
(d)	an eligible private company / holding company of a group of eligible private companies which meets two of the following conditions in a financial year (sections 359(1)(c), 359(2), 360, 362, 365 and Schedule 3 section 1(3), (10) and (11)):
	(i)	total revenue / aggregate total revenue not exceeding HK$200 million
	(ii)	total assets / aggregate total assets not exceeding HK$200 million
	(iii)	employees / aggregate number of employees not exceeding 100
	and with a resolution passing with at least 75% approval from members of the holding company and no members vote against the resolution; or
(e)	a holding company of a group of companies comprising one or more small private companies / eligible private companies and one or more small guarantee companies (mixed group) provided that the holding company and all of its subsidiaries meet the prescribed size criteria, and (where any member of the group is an eligible private company but not qualified as a small private company) with a resolution passing with at least 75% approval from members of the holding company and no members vote against the resolution (sections 359(3A), 360, 366A and Schedule 3 section 1(8), (11) and (13)).

The group of small private companies / small guarantee companies / eligible private companies or the mixed group as mentioned above may include non-Hong Kong body corporates.

The resolution passing with at least 75% approval from members as required for an eligible private company / holding company of a group of eligible private companies / a holding company of a mixed group must be given at least 6 months before the end of the financial year and delivered to the Registrar of Companies for registration within 15 days after it is passed (sections 360, 622(1) and 622(2)).

A summary of the above qualifying criteria could be found at below link:

https://www.hkicpa.org.hk/en/Standards-and-regulation/Standards/Our-views/Standards-Interpretations-Guides-and-PN-Members-Handbook/Reference-Materials/SME-Financial-Reporting-Framework-and-Standard/smefrfre2019

If you want to have an analysis to whether your company falls within “reporting exemption” in Companies Ordinance or have any queries about the requirements to apply for the “reporting exemption”, please feel free to contact us for further information.

FAQ

Hot Labels

SHARE

Auditing - Hong Kong

Question

Answer

Related Articles