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Are consolidated subsidiary statements required for Hong Kong company audit?

Released Date: May 03,2021 Article Source: HUANZE

Many business owners who go abroad to explore overseas markets often choose to register a Hong Kong company as a springboard for reinvestment around the world. For example, domestic individuals invest in a registered Hong Kong company, and then the Hong Kong company reinvests in a registered Indian company. But many enterprises do not understand that such a structure of Hong Kong company accounting and Hong Kong company audit, often cause problems.

Many business owners who go abroad to explore overseas markets often choose to register a Hong Kong company as a springboard for reinvestment around the world. For example, domestic individuals invest in a registered Hong Kong company, and then the Hong Kong company reinvests in a registered Indian company. But many enterprises do not understand this structure of Hong Kong companies to do accounting andHong Kong corporate auditThings tend to go wrong. Under this structure, does the Hong Kong company audit need to combine the financial statements of the Indian company? Whether to do a merger is judged by whether the Hong Kong company controls the company in which it invests. If it does, then the Hong Kong company audit must consolidate the financial statements of the invested company. The specific forms of control are as follows:

1The Hong Kong company owns the invested enterprise directly or indirectly through its subsidiaries50%The above voting rights, (e.g51%);

2The Hong Kong company owns the invested enterprise50%or50%If any of the following voting rights can be met at the same time, the Hong Kong Company shall also be deemed to control the invested enterprise.

(1) holding majority voting rights on the board of directors or similar bodies of the invested enterprise;

(2) owns the investee by agreement with other investors in the investee50%Above the right to vote;

(3) Have the right to decide the financial and operational policies of the invested enterprise in accordance with the articles of association or agreements;

(4) has the power to appoint and remove a majority of the members of the board of directors or similar bodies of the invested enterprises.

Are consolidated subsidiary statements required for Hong Kong company audit?

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