Breaking News

SME-FRF & SME-FRS (Revised March 2020)

0 0

Click on right here to obtain the SME-FRF & SME-FRS (Revised), together with the illustrative monetary statements.

 

Qualifying standards for the businesses integrated below the Hong Kong Firms Ordinance

 

An organization integrated below the Hong Kong Firms Ordinance qualifies for reporting below the SME-FRF & SME-FRS if it satisfies the ‘reporting exemption’ standards as set out in part 359 of the brand new Firms Ordinance. Efficient from monetary 12 months starting on or after 1 February 2019, part 359 of the brand new Firms Ordinance extends the reporting exemption to the teams that will encompass Hong Kong and non-Hong Kong integrated physique corporates and combined teams (i.e. teams comprising a mixture of small non-public corporations, eligible non-public corporations and small assure corporations). Such standards are highlighted in paragraphs 22-43 of SME-FRF (Revised March 2020) and the qualifying classes are summarised as follows:

 

 

Eligible classes Measurement take a look at Approval from shareholders Part reference
1. A non-public firm which has no subsidiary and isn’t a subsidiary of one other firm

(i.e. that is the kind of non-public firm which might have certified for the reporting exemption below part 141D of the predecessor Firms Ordinance)

 No dimension take a look at is required 100% written approval from shareholders is required for annually

 

(Be aware: if the non-public firm additionally qualifies below class 2 beneath, approval from shareholders wouldn’t be required)

SME-FRF
Para 43
 2. Small non-public firm

The small non-public firm should not exceed any two of the next:

(a) Whole annual income of HK$100 million

(b) Whole property of HK$100 million on the finish of the reporting interval

(c) 100 workers

Approval from shareholders shouldn’t be required below the brand new Firms Ordinance SME-FRF

Paras 36-37

 3. A gaggle of small non-public corporations which can embrace non-Hong Kong physique corporates#

(a) Every firm within the group should qualify as a small non-public firm;

(b) Every non-Hong Kong physique company within the group (if any) would have been certified as a small non-public firm for the monetary 12 months had it been integrated below the brand new Firms Ordinance; and

(c) The combination quantities for the group should not exceed 2 out of three of the scale checks for small non-public corporations

Approval from shareholders shouldn’t be required below the brand new Firms Ordinance SME-FRF
Paras 36-37
 4. Small firm restricted by assure The full annual income of the small firm restricted by assure should not exceed HK$25 million. Approval from members shouldn’t be required below the brand new Firms Ordinance SME-FRF

Paras 34-35

 5. A gaggle of small corporations every restricted by assure which can embrace non-Hong Kong physique corporates#

(a) Every firm within the group should qualify as a small firm restricted by assure;

(b) Every non-Hong Kong physique company within the group (if any) would have been certified as a small firm restricted by assure for the monetary 12 months had it been integrated below the brand new Firms Ordinance; and

(c) The combination annual income of the group should not exceed HK$25 million

Approval from members shouldn’t be required below the brand new Firms Ordinance SME-FRF

Paras 34-35

 6. Bigger “eligible” non-public firm

The non-public firm should not exceed any two of the next:

(a) Whole annual income of HK$200 million

(b) Whole property of HK$200 million on the finish of the reporting interval

(c) 100 workers

A minimum of 75% of all of the members should go a decision at a common assembly that the corporate is to fall throughout the reporting exemption for the monetary 12 months; and not one of the members holding the remaining voting rights in that firm vote towards the decision* SME-FRF
Paras 38-39, 42
 7. A gaggle of “eligible” corporations which can embrace non-Hong Kong physique corporates#

(a) Every firm within the group should meet both the scale take a look at of small non-public firm or bigger “eligible” non-public firm;

(b) Every non-Hong Kong physique company within the group (if any) would have been certified as both a small non-public firm or a bigger “eligible” non-public firm for the monetary 12 months had it been integrated below the brand new Firms Ordinance on the premise of its dimension; and

(c) The combination quantities for the group in whole should not exceed 2 out of three of the scale checks for bigger “eligible” non-public corporations

 

A minimum of 75% of all of the members of the holding firm of the group should go a decision at a common assembly that the holding firm is to fall throughout the reporting exemption for the monetary 12 months; and not one of the members holding the remaining voting rights within the holding firm vote towards the decision* SME-FRF

Paras 38-39, 42

 8. Combined group (being a bunch comprising a mixture of (i) a number of small and/or eligible non-public corporations and (ii) a number of small assure corporations) which can embrace non-Hong Kong physique corporates#

(a) If the holding firm in that combined group is a small non-public firm, the mixture quantities for the combined group in whole should not exceed 2 out of three of the scale checks for a bunch of small non-public corporations (class 3).

(b) If the holding firm in that combined group is an eligible non-public firm, the mixture quantities for the combined group in whole should not exceed 2 out of three of the scale checks for a bunch of bigger “eligible” corporations (class 7) ##.

(c) If the holding firm in that combined group is a small assure firm, the mixture annual income of the combined group should not exceed HK$25 million.

 

(a) For a combined group which doesn’t exceed the scale limits of a bunch of small non-public corporations (class 3) or small assure corporations (class 5), approval from members shouldn’t be required below the brand new Firms Ordinance

 

(b) For a combined group with bigger “eligible” non-public firm throughout the group, no less than 75% of all of the members of the holding firm of the group should go a decision at a common assembly that the holding firm is to fall throughout the reporting exemption for the monetary 12 months; and not one of the members holding the remaining voting rights within the holding firm vote towards the decision*

SME-FRF

Paras 39A, 42

# # These dimension checks for bigger “eligible” teams would additionally apply to combined teams if the holding firm of the combined group is a personal firm and the combined group in whole exceeds the scale checks for a bunch of small non-public corporations as set out in class 3 above.

 

* For classes 6 to eight above, the 75% vote is calculated as a proportion of your entire shareholding of the corporate looking for to make use of the reporting exemption, not merely as a proportion of the shareholders of that firm who attend the overall assembly. The decision is defeated if any member of that firm objects both on the assembly or at any time by giving discover in writing to the corporate, supplied that written discover is given no less than 6 months earlier than the top of the monetary 12 months to which the objection relates.

 

The next kinds of firm are usually not eligible for the reporting exemption below the brand new Firms Ordinance and so are usually not permitted to organize their monetary statements in accordance with SME-FRF & SME-FRS:

  • the entity carries on any banking enterprise and holds a legitimate banking licence granted below the Banking Ordinance (Cap. 155);

  • the entity accepts, by means of commerce or enterprise (aside from banking enterprise) loans of cash at curiosity or repayable at a premium, aside from on phrases involving the problem of debentures or different securities;

  • the entity is a company licensed below Half V of the Securities and Futures Ordinance (Cap. 571) to hold on a enterprise in any regulated exercise throughout the which means of that Ordinance; or

  • the entity carries on any insurance coverage enterprise, in any other case than solely as an agent.

 

The holding firm shouldn’t be eligible for the reporting exemption below the brand new Firms Ordinance and so are usually not permitted to organize their monetary statements in accordance with SME-FRF & SME-FRS when the group of which it’s the holding firm consists of one kind of corporations set out in aforementioned paragraph or features a non-Hong Kong physique company that:

 

  • carries on any enterprise that, had it been carried on in Hong Kong, could be required to be carried on below a legitimate banking licence granted below the Banking Ordinance (Cap. 155); accepts, by means of commerce or enterprise (aside from banking enterprise) loans of cash at curiosity or repayable at a premium, aside from on phrases involving the problem of debentures or different securities;
  • carries on any enterprise that, had it been carried on in Hong Kong, could be required to be carried on below a licence below Half V of the Securities and Futures Ordinance (Cap. 571) to hold on a enterprise in any regulated exercise throughout the which means of that Ordinance;

  • carries on any insurance coverage enterprise, in any other case than solely as an agent; or

  • would have fallen throughout the which means of public firm in part 12 of the brand new CO had it been integrated below the brand new CO.

 

The brand new Firms Ordinance units out particular necessities referring to figuring out which years are related for passing the scale checks. Normally, an organization should go the scale checks for 2 consecutive years so as to turn into eligible within the third 12 months. Equally an organization would usually need to fail the checks for 2 consecutive years so as to turn into ineligible within the third 12 months. Nevertheless, there are particular transitional guidelines on this regard which apply within the first 12 months that this a part of the brand new Firms Ordinance comes into operation and likewise in any 12 months during which a bunch acquires a brand new subsidiary. It’s subsequently essential to take care to confer with the related sections of the brand new Firms Ordinance when figuring out whether or not an organization is eligible. 

 

Qualifying standards for the businesses NOT integrated below the Hong Kong Firms Ordinance

 

Topic to any particular necessities imposed by the regulation of the corporate’s place of incorporation and topic to its structure, these corporations qualify for reporting below the SME-FRF & SME-FRS (Revised March 2020) once they meet the identical necessities {that a} Hong Kong integrated firm is required to satisfy below part 359 of the brand new Firms Ordinance.

 

 

 

Final up to date: 3 April 2020

 

 

 

Source

Happy
Happy
0 %
Sad
Sad
0 %
Excited
Excited
0 %
Sleepy
Sleepy
0 %
Angry
Angry
0 %
Surprise
Surprise
0 %

Average Rating

5 Star
0%
4 Star
0%
3 Star
0%
2 Star
0%
1 Star
0%

Leave a Reply

Your email address will not be published. Required fields are marked *