How does a Hong Kong company appoint its auditor each year?
Members appoint the auditor by resolution at the AGM held for the previous financial year. A private company that skips the AGM can appoint at a general meeting before the appointment period ends, or the auditor can be deemed reappointed unless an exception applies.
Normal route (s.396) The company appoints the auditor for a financial year by a resolution passed at the AGM held in respect of the previous financial year. If the AGM did not appoint one, the company must appoint at another general meeting.
If the company does not hold an AGM (s.612(2))
- The company must appoint by resolution at a general meeting before the end of the "appointment period" for that year (s.396(3)-(4)), unless the incumbent is deemed reappointed (s.403).
- Deemed reappointment applies on the same terms if no one has been appointed by the end of the appointment period.
When deemed reappointment does not apply (s.403(2))
- The person was appointed as first auditor by the directors or filled a casual vacancy.
- The articles require an actual appointment.
- The members resolved at a general meeting (on special notice) that the person should not be reappointed.
- The auditor declines in writing.
- Members holding at least 5% of voting rights (or a lower percentage set in the articles) give notice that the person should not be reappointed.
Fees The remuneration of an auditor appointed by members is fixed by resolution at a general meeting or in the manner that resolution sets (s.404).
Practical tip Record the reappointment in the board or members' minutes each year so the file shows an unbroken appointment.
Legal basis
- Companies Ordinance (Cap. 622), ss.394, 396, 403, 404, 612
Sources
Applies to 2026 · Last reviewed 29 October 2026
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.
Related questions
- Does every Hong Kong limited company need an audit?Yes. Every Hong Kong company must have an auditor for each financial year and its financial statements audited, whatever its size or whether it trades. The only company that escapes is a qualifying private company that has validly become dormant under s.5 and s.447 of the Companies Ordinance.
- Do I still need an audit if my company had no revenue or no business activity?Yes, unless the company has formally become dormant. Having no sales does not make a company dormant in law. If it had any expenses, bank charges or other recorded transactions, the audit duty continues for that year.
- My company is loss-making. Do I still need to audit it?Yes. Profit or loss has no bearing on the audit requirement. A loss-making company is audited every year, and the auditor will also look closely at going concern.
- How do I make my Hong Kong company dormant to avoid the audit?Check the company qualifies, pass a special resolution declaring it will become dormant from a stated date, and have the directors deliver that resolution to the Companies Registrar. Dormancy takes effect from the delivery date or the later date in the resolution.
- Does a dormant Hong Kong company still have to file a profits tax return?Dormancy under the Companies Ordinance relieves the company from audited accounts, and IRD accepts a profits tax return from it without the audited statements. It does not by itself cancel the duty to file a return when IRD issues one.