Part 2- FZLLC Special Regulations
Chapter 4- Records, Accounts and Auditors
Section 1- Maintenance of Records
Article 117. Purpose of Maintenance of Records
The FZLLC must maintain records for accounting purposes that are sufficient:
- To account for sum of monies received and expended;
- To document the assets and liabilities;
- To document all sales and purchases of goods by the FZLLC;
- To disclose the financial position.
Article 118. Nature of Records
Records for accounting purposes include transactional, financial and contractual documentation, as well as supporting documents and information, that is generated during the course of operation or business of the FZLLC.
Article 119. Period of Retention
Records for accounting purposes must be retained by the FZLLC for a period of five (5) years from the date a record is created.
Article 120. Inspection of Records
Records for accounting purposes should be made available for inspection by a Shareholder, Director, auditor, Manager, secretary, the Registrar or a person authorized to inspect the Records.
Section 2- Accounts
Article 121. Financial Statements to be Laid before General Meeting
The Director(s) of every FZLLC shall, for each financial year, lay before the FZLLC in General Meeting:
a. Financial statements for such period which shall include:
- A statement of the results of operations for such period (i.e. a profit and loss account);
- A statement of retained earnings or deficit;
- A balance sheet at the end of such period;
- A statement of changes in financial position for such period;
- Notes to the financial statements which shall include a description of the generally accepted accounting principles used in the preparation of the financial statements, and which principles shall be such accepted accounting principles as may be appointed by the Authority and where the generally accepted accounting principles used are other than those of the Free Zone, the notes shall identify the generally accepted accounting principles so used. The Authority may appoint generally accepted accounting principles promulgated by an accounting standard setting body which may be either International Accounting Standards (IAS) or such other standards as the Authority may determine from time to time; and
- Further information as required by these Regulations, any applicable rules, standards and policies issued by the Authority from time to time and the FZLLC own MOA and AOA.
b. The report of the auditors in respect of the financial statements.
Article 122. Signature of the Financial Statements to be Laid before General Meeting
Financial statements mentioned in the above article 121 shall be signed on the balance sheet page by the Director(s) of the FZLLC.
Article 123. Adjourning the General Meeting for not Laying the Financial Statements
If at a General Meeting at which financial statements should be laid, the statements have not been so laid; it shall be lawful for the chairman to adjourn the meeting for a period of up to ninety (90) days or a longer period as the Shareholders may agree.
Article 124. Right to Receive Copies of Financial Statements
a. A copy of the financial statements of the FZLLC, including every document required by these Regulations or the Articles of Association of the FZLLC shall be made available to every Shareholder of the FZLLC.
b. If such financial statements and other documents are not sent to each Shareholder seven (7) days before the general meeting, any Shareholder may request adjourning the meeting for seven (7) days provided that this article shall not require the making available of the financial statements and other documents to:
- Any person not entitled to receive notices of General Meetings;
- More than one of the joint holders of any Shares; and
- Any person whose address is not known to the FZLLC.
Section 3- Auditors
Article 125. Appointment, Removal and Resignation of an Auditor
a. The Authority will maintain a list of approved auditors and the FZLLC must appoint an auditor from this list for the purpose for which an auditor is required under these Regulations.
b. The FZLLC must not appoint an auditor who:
- Has, or may reasonably be perceived to have, a conflict of interest; or
- Is not, or may reasonably be perceived not to be, independent from the affairs of the FZLLC.
c. The Shareholders may by an Ordinary Resolution, or by a resolution passed by such greater percentage majority of Shareholders with voting rights as prescribed in the Memorandum of Association and Articles of Association, appoint one or more auditors to hold until the close of the next General Meeting, and if an appointment is not so made, the term of the appointment of the auditor already appointed will extend until a successor is appointed. The Shareholders at the first General Meeting must appoint the first auditor, and if the Shareholders fail to do so, the Director(s) must promptly appoint an auditor.
d. The Shareholders may by an Ordinary Resolution, or by a resolution passed by such greater percentage majority of Shareholders with voting rights as prescribed in the Memorandum of Association and Articles of Association, remove an auditor before the expiry of the term of appointment, and must appoint another for the remainder of the term of the removed auditor.
e. The remuneration of an auditor will be fixed by the Shareholders.
f. An Auditor may resign as an auditor by a notice of at least forty two (42) days in writing to the FZLLC stating the circumstances surrounding the registration. The Directors must forthwith call a General Meeting for the appointment of an auditor in accordance with these Regulations to ensure that a replacement auditor is appointed by the time the resigning auditor’s resignation comes into effect.
Article 126. Auditor’s Report
a. An Auditor must audit the accounts of the FZLLC once a year and prepare an auditor’s report.
b. An Auditor’s report must:
- Identify the standards or principles used in preparing the accounts;
- State whether in the auditor’s opinion the accounts have been prepared in accordance with these Regulations and applicable laws, standards and principles;
- State whether the accounts give a true and fair view of the financial affairs; and
- State any other matter or opinion required under these Regulations.
c. An Auditor has the right to access the Records of the FZLLC that may be required for the audit.
d. The FZLLC must disclose the requested information to the auditor.