Under the new CO, private or guarantee companies and holding company of a group of companies (other than certain companies specifically excluded) that meet the specified size criteria are referred to as companies falling within the “reporting exemption”. Other private companies (not being a member of a corporate group) with unanimous members’ written agreement may also benefit from the reporting exemption. Companies that fall within the reporting exemption can prepare simplified financial statements and is subject to less stringent requirements for the preparation of auditors’ reports and directors’ reports. For details about reporting exemption, please refer to Q3 to Q10 of the FAQs on Accounts and Audit.
Under the Amendment Ordinance, two other types of corporate groups can benefit from the reporting exemption provided that both the holding company and all its subsidiaries meet the size criteria –
- holding companies of corporate groups comprising small private companies or eligible private companies and small guarantee companies (mixed groups); and
- holding companies of groups of small private companies, eligible private companies, small guarantee companies, or mixed groups described in paragraph (i) above, with non-Hong Kong subsidiaries.