For anyone conducting due diligence on a Hong Kong company—be it for a merger, acquisition, investment, or legal dispute—access to historical corporate records is often the backbone of your investigation. Minutes of meetings, shareholder resolutions, and directors’ decisions can reveal critical insights: how assets were transferred, why bylaws were amended, or who approved a contentious transaction.
But what if those records simply no longer exist?
In Hong Kong, corporate record-keeping is not just a matter of good governance—it’s governed by strict legal timelines. Under the Companies Ordinance, specifically Schedule 11, there is a rule that many international investors and advisors overlook until it’s too late: the 10-year destruction rule.
This article explains what this rule means, why it matters for your due diligence, and how you can navigate the gaps it may leave in a company’s historical narrative.
Understanding the 10-Year Rule
The Companies Ordinance (Cap. 622) sets clear requirements for how long a Hong Kong company must retain certain statutory records. Among them are minutes of general meetings, records of written resolutions, and other decision-making documents.
According to Schedule 11, Part 12, Section 108(2) of the Ordinance, a company is not required to keep such records or minutes if they have been preserved for at least 10 years from the date of the resolution, meeting, or decision.
In simple terms:
- Year 0: A resolution is passed.
- Year 1–10: The company must retain the record.
- Year 10+: The company may legally destroy it.
This means that for decisions made more than a decade ago, there is no legal obligation for the company to still hold the paperwork. If they’ve disposed of it, they haven’t broken the law—but your due diligence may hit a dead end.
Why This Matters for Due Diligence
When you’re investigating a Hong Kong company’s past, especially for transactions, ownership disputes, or compliance reviews, missing records can:
- Break the chain of evidence – Without minutes or resolutions, it becomes difficult to verify whether a past transaction was properly authorized.
- Hide historical risks – Early-stage decisions about debt, asset transfers, or director appointments may be obscured.
- Complicate legal claims – In disputes, the absence of records can weaken a party’s ability to prove what was agreed or resolved years earlier.
Imagine you’re acquiring a Hong Kong company that sold a valuable subsidiary 12 years ago. You want to confirm that the sale was approved by the board and shareholders. If the minutes from that meeting were destroyed under the 10-year rule, you may never know for sure.
What Records Are Affected?
The rule applies primarily to:
- Minutes of general meetings
- Records of written resolutions
- Decisions documented in company books
It does not apply to all company documents. For example, the Company Register, Annual Returns, and filings with the Companies Registry must be kept indefinitely or as specified by other regulations.
How to Overcome the “Record Gap”
If key minutes or resolutions are missing, all is not lost. A thorough due diligence process will look for alternative sources of verification:
| Alternative Source | What It Can Reveal |
|---|---|
| Annual Returns filed with the Companies Registry | Changes in directors, shareholders, or share capital around the time of the decision. |
| Charges Register | Records of secured loans or assets pledged. |
| Public announcements or circulars | If the company is listed or issued formal notices. |
| Older versions of Articles of Association | Filed amendments may reflect past resolutions. |
| Financial statements and auditors’ reports | May reference major decisions or transactions. |
Often, a combination of these sources can help reconstruct the company’s historical actions—even without the original minutes.
Practical Tips for Investigators
- Ask early – During due diligence, explicitly request records older than 10 years. Some companies may still retain them voluntarily.
- Check the Companies Registry – Many decisions that affect the company’s public standing (like director changes or charge registrations) are filed separately and remain accessible.
- Consult professionals – Engaging a firm that specializes in Hong Kong corporate record retrieval can help you navigate what’s available and what’s not. For example, a Hong Kong Company Report can consolidate current and historical public filings into one coherent profile.
- Document the gap – If records are missing, note it in your due diligence report. Explain the legal basis (the 10-year rule) and describe alternative checks performed.
The Bigger Picture: Good Governance vs. Legal Minimum
While the 10-year rule sets a legal minimum, well-governed companies often keep records far longer—for internal reference, tax purposes, or ongoing legal matters. The absence of older records isn’t always a red flag, but it should prompt deeper questioning:
- Why were the records destroyed?
- Is the company generally diligent about documentation?
- Are there other signs of poor record-keeping?
In due diligence, context is key.
Final Thoughts
The 10-year destruction rule is a quiet but important feature of Hong Kong corporate law. It protects companies from indefinite storage burdens—but it also creates a natural “memory loss” for businesses older than a decade.
For overseas investors, partners, and advisors, understanding this rule means adjusting your due diligence approach: look beyond the minutes, tap into multiple registries, and always have a plan B when paper trails fade.
If you’re conducting due diligence on a Hong Kong company and need help retrieving or interpreting available records, consider using a professional company report service to ensure no stone is left unturned. At ChinaBizInsight, we specialize in retrieving and analyzing corporate documents from Hong Kong and mainland China, helping you know your Chinese partners with clarity and confidence.