A Hong Kong limited company is generally required to keep proper accounting records. These records must be sufficient to show and explain the company’s transactions and disclose its financial position with reasonable accuracy. In Hong Kong, accounting records should generally be kept for at least 7 years.
In practice, this means the company should maintain bookkeeping records such as bank statements, sales and purchase invoices, expense receipts, contracts, and other supporting documents. Based on these records, the company prepares financial statements for each financial year.
For most Hong Kong limited companies, annual financial statements are also subject to audit. Under the Companies Ordinance, audit is generally required for companies, and the main exception is a company that has formally become dormant under the law.
Apart from bookkeeping and audit, the company also has tax filing obligations. A Profits Tax Return is filed with the Inland Revenue Department, and the filing generally requires supporting documents such as the financial statements and tax computation. For a newly incorporated company, the first Profits Tax Return is generally issued about 18 months after incorporation, although the tax authority may issue it earlier in some cases.
This should not be confused with the Annual Return filed with the Companies Registry. For a local private company, Form NAR1 must generally be filed within 42 days after each anniversary of incorporation. This filing is separate from audit, tax filing, and business registration renewal.
In short, the core accounting requirements for a Hong Kong limited company usually include proper bookkeeping, annual financial statements, annual audit, profits tax filing, and ongoing statutory filing compliance. Clear records and timely filing are essential for keeping the company compliant.
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