The answer first
Sooner or later, someone will look closely at your company: a bank on its periodic review, an investor, a buyer, a new auditor or a regulator. What they find depends on records kept over years, not weeks. This health check lets you find and fix gaps before someone else finds them.
Most issues found in due diligence are basic: missing filings, registers that do not match, unstamped transfers, missing contracts. Fixing them in advance is cheaper and quicker than fixing them under deadline pressure in a transaction.
At a glance
- Who looks
- Banks, investors, buyers, auditors, regulators
- What they find first
- Missing filings, mismatched registers, unstamped transfers, missing contracts
- Where to start
- A Companies Registry search on your own company
Corporate records
| Check | What good looks like |
|---|---|
| Annual Returns | All filed on time; contents match registers |
| Change notices | Every change in directors, secretary, address and shares filed |
| Registers | Members, directors, secretaries, charges and significant controllers complete |
| Minutes | Board and members' decisions recorded for at least 10 years |
| Share transfers | Stamped and registered; certificates issued |
| Articles | Current version on file and consistent with practice |
Financial and tax
| Check | What good looks like |
|---|---|
| Accounts | Audited every year; management accounts monthly |
| Tax | All Profits Tax Returns filed; tax paid; no open disputes |
| Employer's Returns and IR56 forms | Filed for every employee |
| MPF | All employees enrolled; contributions paid on time |
| Related-party transactions | Documented and at arm's length |
| Director loans | Documented and compliant with the Companies Ordinance |
Contracts, people and assets
- Key customer and supplier contracts signed and filed, including change-of-control terms.
- Employment contracts for all staff; employees' compensation insurance in force.
- Intellectual property owned by the company, with assignments from founders and contractors.
- Licences and permits current.
- Leases and insurance policies in the company's name.
- Data privacy and anti-money laundering procedures documented where relevant.
Key takeawayStart with the Companies Registry search on your own company. If the public record and your own records do not match, that is the first thing to fix.
Self-check: where do you stand?
| Question | If the answer is no |
|---|---|
| Do your registers match the Companies Registry record? | Reconcile and file missing notices |
| Are all years audited and all tax returns filed? | Clear any backlog |
| Is every share transfer stamped? | Arrange late stamping with advice |
| Does the company own its brand and software? | Obtain written assignments |
| Are all employees on written contracts and enrolled in MPF? | Regularise now |
| Could you assemble a data room in a week? | Start building it |
How DBMS Global can help
- A full company health check, with a written list of issues and the cost to fix them.
- Rectification of filings, registers and records.
- Preparation of the corporate section of a data room.
- MAP Asia Pacific and RENT-CFO support transactions and financial due diligence.
In summary
- Due diligence finds basic gaps first.
- Fix them early, at lower cost.
- A clean company earns trust, and often a better price.
Official references
- Companies Registry: search services, www.cr.gov.hk
- Inland Revenue Department, www.ird.gov.hk
- Mandatory Provident Fund Schemes Authority, www.mpfa.org.hk