In this course · 6 of 6
Course 1
Know your record duties
6 lessons · 7 min
- 1Bookkeeping vs Accounting in Hong Kong: What Is the Difference?
- 2Is a Hong Kong company legally required to keep accounting records?
- 3What Records Must a Hong Kong Company Keep? Section 373 Checklist
- 4What Does Section 51C Require from a Hong Kong Business? (IRD Records)
- 5Does Business Registration Cover Bookkeeping in Hong Kong?
- 6Penalties for Not Keeping Accounting Records in Hong Kong
The short answer
Under the Companies Ordinance, a director who fails to take all reasonable steps faces a fine of HK$300,000, and a fine plus up to 12 months' imprisonment if wilful. Under the Inland Revenue Ordinance, failing to keep business records without reasonable excuse can bring a fine of up to HK$100,000.
Companies Ordinance (Cap. 622)
| Offence | Section | Who | Maximum penalty |
|---|---|---|---|
| Not keeping adequate records, keeping them in the wrong place, or not preserving them for 7 years | ss.373, 374, 377 | director | HK$300,000 |
| The same failure, if wilful | ss.373, 374, 377 | director | HK$300,000 and 12 months' imprisonment |
| Not allowing a director to copy records | s.375 | company and responsible persons | level 5 fine (HK$50,000) plus HK$1,000 a day |
| Records not adequately recorded | s.376(1) | company and responsible persons | level 3 fine (HK$10,000) plus HK$300 a day |
| No safeguards against falsification, or electronic records that cannot be printed | s.376(3)-(4) | company and responsible persons | level 3 fine (HK$10,000) |
Detail on the director offences:
- Failure to keep adequate accounting records (s.373), to keep them in the right place (s.374) or to preserve them for seven years (s.377): the director commits an offence, with a fine of HK$300,000.
- If the failure to take all reasonable steps is wilful: HK$300,000 and imprisonment for 12 months.
- Defence: the director reasonably believed that a competent and reliable person was charged with the duty and in a position to do it.
- Not allowing a director to copy records (s.375): a level 5 fine (HK$50,000) plus HK$1,000 for each day the breach continues.
- Records not adequately recorded (s.376(1)): a level 3 fine (HK$10,000) plus HK$300 a day. No safeguards against falsification, or electronic records that cannot be printed (s.376(3)-(4)): a level 3 fine (HK$10,000). These fall on the company and every responsible person.
Inland Revenue Ordinance (s.51C)
- A fine of up to HK$100,000 for failing, without reasonable excuse, to keep sufficient records.
Indirect costs. Poor records usually lead to delays in the audit, estimated or disputed tax assessments, higher accounting fees to rebuild the books, and difficulty proving deductions.
The fine levels come from Schedule 8 of the Criminal Procedure Ordinance (Cap. 221). These are maximums set by statute; actual outcomes depend on a court's decision.
This is general information, not legal advice or a substitute for your statutory audit.
Legal basis and sources
The law
- Companies Ordinance (Cap. 622), ss.373-377
- Inland Revenue Ordinance (Cap. 112), s.51C
General information for business owners, not legal, tax or professional advice. Rules change, so check the sources or ask a licensed professional before you act.
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