{"id":118,"date":"2025-01-07T14:58:54","date_gmt":"2025-01-07T06:58:54","guid":{"rendered":"http:\/\/www.pinerycpa.com\/?page_id=118"},"modified":"2025-03-04T21:47:00","modified_gmt":"2025-03-04T13:47:00","slug":"fund-audit","status":"publish","type":"page","link":"http:\/\/www.pinerycpa.com\/index.php\/fund-and-licensed-corporations-services-2\/fund-audit\/","title":{"rendered":"Fund Audit"},"content":{"rendered":"

Fund Audit<\/h2><\/div>
<\/div>

What is the purpose of a fund audit?<\/strong><\/h3>

The main purpose of a fund audit is to confirm that the fund\u2019s general partners (GP) are operating in accordance with the fund\u2019s limited partnership agreement (LPA), and that the fund\u2019s financials reflect this compliance. A clean audit is one that doesn\u2019t turn up any surprises: It reassures the fund\u2019s limited partners (LPs) that the GPs are managing the fund as agreed.  A second purpose of an audit is to confirm the fund\u2019s valuations of its portfolio companies, as well as the fund\u2019s ownership position in them.   An audit assures your fund\u2019s investors that a neutral, third-party accounting firm has confirmed not only the fund\u2019s financial statements, but also its assessment of its own success.  <\/p>

What are the fund structures available in Hong Kong?<\/strong><\/h3>

Hong Kong provides various legal fund vehicles catered to the industry, with a corporate structure in the form of Open-ended Fund Companies (OFC) and a limited partnership model in the form of Limited Partnership Funds (LPF), complementing the long standing unit trust structure. <\/p>

Key features<\/strong><\/td>Open-ended Fund Company (OFC)<\/strong><\/td>Limited Partnership Fund (LPF)<\/strong><\/td><\/tr>
Number of Directors required<\/td>2, with at least 1 director independent of the custodian<\/td>1 general partner and at least 1 limited partner <\/td><\/tr>
Directors\u2019 residence requirement<\/td>No<\/td>No residence requirement for general partner or limited partner<\/td><\/tr>
Fund manager<\/td>Requires a Type 9 (asset management) licensed Investment Manager under SFC<\/td>If no regulated activities under SFO is involved, there is no need to appoint an external licensed investment manager<\/td><\/tr>
Auditor<\/td>An auditor must be appointed<\/td>An auditor must be appointed<\/td><\/tr>
Custodian<\/td>A custodian must be appointed<\/td>No requirement to appoint a custodian, but the GP is under duty to ensure the proper custody of LPF\u2019s assets<\/td><\/tr>
Public availability of Shareholder lists<\/td>No<\/td>No<\/td><\/tr>
Re-domiciliation<\/td>Yes<\/td>Yes<\/td><\/tr><\/tbody><\/table><\/figure>

<\/p>

\"\"<\/figure><\/div>\n\n
A unit trust is established under a trust deed <\/span>and the most common form of unit trust structure in Hong Kong is the two party trust deed. A unit trust is generally set up for asset protection, estate planning, or asset management purposes. Obligations are enacted pursuant to the provisions of the trust deed, the Trustee Ordinance and general common law. Selecting an appropriate trustee for the unit trust is crucial as they will manage the trust assets and ensure compliance with legal requirements. With the aforementioned Hong Kong fund structures, asset and wealth managers have flexibility and the ability to align the domicile of the fund with their commercial substance.<\/span><\/div><\/div>

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