| Accounts |
- Accounts deserve a special mention because it is the personal responsibility of each director to ensure that they are prepared, circulated to the members and delivered to Companies House within the time allowed.
- Every limited company must submit accounts to Inland Revenue Department if it has traded.
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The financial year
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- This is the period covered by the accounts.
- For a new company, it starts on the date of incorporation, regardless of when the company actually starts doing business.
- For a company which has previously delivered accounts, it starts from the day after the period covered by the earlier accounts.
- The financial year ends on the company's accounting reference date, we suggest it to be 31/12 or 31/03.
- A particular financial year can be less or more than 12 months, but it cannot be more than 18 months.
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Accounting reference date
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- This date will be the last day of the month in which the first anniversary of its incorporation occurs.
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| Contents of the accounts |
- The accounts and reports prepared for the members of the company must include:
- a directors’ report;
- a profit and loss account;
- a balance sheet.
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| Audit |
- Unless the company is able to claim exemption from audit, its accounts must be audited and the auditor's report included with the accounts provided for the members and for Tax department.
- The directors may appoint the first auditors to hold office until the first general meeting.
- The auditors are normally appointed at a general meeting at which accounts are considered.
- The auditor must be a member of a recognised supervisory body and eligible under the rules of that body to act as a company auditor.
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| Approval of accounts and directors’ report |
- The accounts must be approved by the board of directors, one of whom must sign the balance sheet.
- The directors' report must also be approved by the board and signed by a director or the secretary.
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| Circulation of accounts and reports |
- The accounts must normally be considered by a general meeting of the company, usually the annual general meeting.
- A copy of the accounts and reports must be sent to every member or debenture holder, or anyone else entitled to attend, at least 21 days before the meeting takes place.
- In the case of a private company, the meeting to consider the accounts will normally be not later than 10 months after the accounting reference date.
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| Delivery of accounts to Companies Registry |
- Late delivered civil penalty is an automatic in the range of HKD 1 500 - 5 000 for a private company.
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| Annual returns |
- The first annual return must be made up to a date not more than 12 months after incorporation. Further returns should be at intervals of not more than 12 months.
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