Section 11: Section 11: Accounting and Audit Requirements
Article 79 - Maintenance of Accounting Records
LLCshall keep proper accounting Recordswith respect to all sums of money received and expended by the LLCand all sales and purchases of goods and services and other transactions by the LLCand the assets and Liabilitiesof the LLC. Such accounting Records, shall be sufficient to show and explain all transactions by the LLCand must be such as to:(1) disclose with reasonable accuracy the financial position of the LLCat any time; and(2) enable the directors to ensure that any accounts prepared by the LLCcomply with the requirements of these Regulations.
Article 80 - Location of Accounting Records(1) The
LLC'saccounting Recordsshall be:(A) kept at the LLC'sregistered office;(B) preserved by the LLCfor at least 6 years from the date to which they relate; and(C) at all reasonable times be open to inspection by the directors and auditor of the LLC.(2) If an LLCfails to comply with Article 79 and Article 80(1), the LLCand every Officeris in contravention of these Regulations. Amended (as from 5th April 2015).
Article 81 - Financial year of an LLC(1) The first financial year of an
LLCstarts from the day on which it is incorporated and lasts for the period ending on the financial year end date specified in the incorporation document falling not less than 6 months and not more than 18 months after incorporation of the LLC.(2) The second and any subsequent financial year shall start with the day immediately following the end of the LLC'sprevious financial year and end on the financial year end date in the next calendar year.(3) An LLCmay by notice in the Prescribed Formgiven to the CROspecify a new financial year end date having effect in relation to:(A) the LLC'scurrent financial year and subsequent financial years; or(B) the LLC'sprevious financial year and all financial years subsequent to that previous financial yearwhere, an LLC's"previous financial year" means that year immediately preceding its current financial year.(4) The notice shall state whether the current or previous financial year:(A) is to be shortened, so as to come to an end on the first occasion on which the new financial year end date falls or fell after the beginning of the financial year; or(B) is to be extended, so as to come to an end on the second occasion on which that date falls or fell after the beginning of the year.(5) A notice under Article 81(3), stating that the current or previous financial year is to be extended is ineffective, if given less than 5 years after the end of an earlier financial year of the LLCwhich was extended by virtue of this Article.(6) A notice under Article 81(3) may not be given in respect of a previous financial year if the period allowed for laying and delivering accounts in relation to that year has al expired.(7) An LLC'sfinancial year shall not, in any case, be extended so as to exceed 18 months and a notice under Article 81(3) is ineffective if the current or previous financial year as extended in accordance with the notice would exceed that limit. Amended (as from 5th April 2015).
Article 82 - LLC accounts(1) The directors of every
LLCshall cause accounts to be prepared in relation to each financial year of the LLCwhich shall be in the English language and shall comprise or include:(A) financial statements set out in accordance with IFRS, UK GAAP, US GAAPor such other accounting principles and standards as may be prescribed in rules made by the QFC Authority; and(B) such further information as may be required by these Regulations, any rules made by the QFC Authorityand the LLC'sarticles of association.(2) The accounts shall be prepared in accordance with accounting principles and standards prescribed in rules made by the QFC Authorityand comply with any other requirements of these Regulationsor any rules made by the QFC Authority. The accounts shall show a true and fair view of the profit or loss of the LLCfor the financial year in question and of the state of the LLC'saffairs at the end of such financial year.(3) The LLC'saccounts shall be approved by the directors and signed on their behalf by at least one of their number.(4) Within 4 months of the end of the financial year the accounts for that year shall be:(A) prepared and approved by the directors;(B) examined and reported on by the LLC'sauditors in accordance with these Regulationsand any rules made by the QFC Authority, such auditors' report to be written in the English language; and(C) laid before a meeting of the Memberstogether with a copy of the auditors' report.(5) The LLCshall file with the CROwithin 21 days after the meeting of the Membersbefore which the accounts and auditor's report were laid, a copy of the accounts and auditor's report.(6) In this Section 11, reference to "accounts" are to those accounts prepared in accordance with this Article.(7) This Article does not apply to an LLCthat is a Collective Investment Fund. Amended (as from 5th April 2015).
Article 83 - Provision of copy of accounts to Members(1) Any
Memberof an LLCis entitled, on demand and without charge, to be furnished with a copy of the LLC'slatest audited accounts and auditor's report.(2) An LLCshall comply with such a request within 7 days.(3) If an LLCfails to comply with Article 83(2), the LLCand every Officeris in contravention of these Regulations. Amended (as from 5th April 2015).
Article 84 - Publication of accounts
Any accounts published by an
LLCmust be audited and a copy of the auditors' report must accompany the published accounts.
Article 85 - Qualification of auditor(1) An
LLC'sauditor shall be an individual auditor or firm of auditors qualified to act as auditors in the QFCand approved by the QFC Authorityto act as auditors for LLCsand other Companiesand other Entitiesincorporated or registered in the QFCand entered in a register of approved auditors which shall be maintained by the CRO.(2) An auditor shall be regarded as qualified and approved by the QFC Authorityto act as an auditor in the QFCand shall be entitled to be entered in the register maintained by the CROif that auditor meets the criteria for approval set out in rules made by the QFC Authority.(3) Entry of an auditor or firm of auditors in the register of auditors shall be without prejudice to any rules concerning auditors made by the Regulatory Authoritypursuant to the Financial Services Regulations.
Article 86 - Appointment and removal of auditor(1) An
LLCshall appoint one or more auditors or a firm of auditors who shall examine and report on the LLC'saccounts in accordance with these Regulations. Except as provided for in Article 86(6) and Article 88(4) the LLCshall give notice in writing to the CROwithin 21 days of the first appointment and any subsequent change in auditor on the Prescribed Formtogether with the Prescribed Fee.(2) No person shall be appointed as auditor of an LLCwho is an Officeror employee of that LLCor of an Affiliated Companyor who is a partner, employer or employee of any such Officeror employee.(3) The directors of an LLCshall appoint the auditor of that LLCfor its first financial year. In subsequent financial years, an LLCshall at its annual general meeting appoint an auditor to hold office from the conclusion of that meeting to the conclusion of the next annual general meeting. The directors or the Membersof the LLCin general meeting may fill any vacancy in the office of auditor. While such a vacancy continues, any surviving or continuing auditor may continue to act.(4) Where for any reason no auditor is appointed, the CROmay, on the application of any Member, appoint one or more auditors to hold office until the close of the next annual general meeting.(5) Notwithstanding any agreement but without prejudice to the auditors' rights to compensation or damages, any auditor of an LLCmay be removed by an Ordinary Resolution.(6) The LLCshall as soon as reasonably practicable and in any event not later than 5 days after the passing of the Ordinary Resolutionreferred to in Article 86(5) file a copy of the Ordinary Resolutionwith the CROin the Prescribed Formtogether with the Prescribed Feeand if an Authorised Firmwith the Regulatory Authority. Amended (as from 5th April 2015).
Article 87 - Remuneration of auditor(1) The remuneration of an auditor of an
LLCappointed by the Membersshall be fixed by the Membersin general meeting or by the directors, if they are authorised to do so by the Members, and the remuneration of the auditor appointed by the directors shall be fixed by the directors.(2) Where one or more auditors are appointed by the CROunder Article 86, the CROshall also fix the remuneration to be paid by the LLCfor its or their services.(3) There shall be stated in a note to an LLC'saudited accounts the amount of the remuneration of the LLC'sauditors in their capacity as such.
Article 88 - Resignation of an auditor(1) An auditor of an
LLCmay resign from office by depositing a notice in writing to that effect at the LLC'sregistered office, and any such notice operates to bring his term of office to an end on the date on which the notice is deposited, or on such later date as may be specified in it.(2) When an auditor ceases for any reason to hold office the auditor shall deposit at the LLC'sregistered office:(A) a statement of any circumstances connected with his ceasing to hold office which he considers should be brought to the notice of the Membersor creditors of the LLC; or(B) if he considers that there are no such circumstances a statement that there are none.(3) Where a statement under this Article 88 falls within Article 88(2)(A), the LLCshall within 21 days send a copy of the statement to each director and Memberof the LLC.(4) The LLCshall as soon as reasonably practicable and in any event not later than 5 days after the deposit of notice of resignation at its registered office file a copy of the notice with the CROin the Prescribed Formtogether with the Prescribed Feeand if an Authorised Firmwith the Regulatory Authority. Amended (as from 5th April 2015).
Article 89 - Auditor's report to LLC(1) An
LLC'sauditor shall make a report to the LLC's Memberson the accounts examined by the auditor.(2) The auditor's report shall state:(A) whether in the auditor's opinion the accounts have been properly prepared in accordance with these Regulations;(B) in particular, whether the accounts have been prepared in accordance with accounting principles and standards referred to in Article 82(2); and(C) any other matter or opinion required under these Regulationsor rules made by the Regulatory Authorityunder the Financial Services Regulations.
Article 90 - Powers and duties of auditor(1) An
LLC'sauditor shall, in preparing a report in relation to the accounts of the LLC, carry out such investigations as will enable the auditor to form an opinion as to the following matters:(A) whether proper accounting Recordshave been kept by the Companyand proper returns adequate for the audit have been received from offices or branches of the LLCnot visited by the auditor;(B) whether the LLC'saccounts are in agreement with such accounting Recordsand returns; and(C) whether the LLC'saccounts have been prepared in compliance with applicable accounting principles and standards.(2) If the auditor is of the opinion that proper accounting Recordshave not been kept, or that proper returns adequate for the audit have not been received from offices or branches not visited by the auditor, or if the accounts are not in agreement with the accounting Recordsand returns, or that the accounts do not comply with accounting principles and standards, the auditor shall state that fact in his report under Article 89.(3) The auditor shall have a right of access at all reasonable times to an LLC'saccounting and other books and Recordsand is entitled to require from an LLC's Officerssuch information or explanation that the auditor considers necessary for the performance of his duties.(4) If the auditor fails to obtain all the information and explanations which, to the best of the auditor's knowledge and belief, are necessary for the purposes of the audit, the auditor shall state that fact in his report under Article 89.(5) Every auditor is entitled to receive notice of, and attend, any meeting of Membersand to be heard on any part of the business of the meeting which concerns the auditor.
Article 91 - Auditor's right to information
LLC, and any Member, Officer, employee or agent of the LLC, shall not knowingly or recklessly make to the LLC'sauditor a statement (whether written or oral) which conveys or purports to convey any information or explanation which the auditor requires, or is entitled to require, as auditor of the LLCand is false, misleading or deceptive in a material particular.
Article 92 - Obstruction of auditor(1) An
LLC, or any Officerof an LLC, or any person acting under the direction or authority of such an LLCor Officer, shall not engage in conduct, including without limitation the:(A) destruction or concealment of Documents;(B) coercion, manipulation, misleading, or influencing of the auditor;(C) failure to provide access to information or Documentsspecified by the auditor; or(D) failure to give any information or explanation which the person is able to givewhere the LLC, Officeror other person knows or ought to have known that such conduct could, if successful, have the effect referred to in Article 92(2).(2) For the purposes of Article 92(1), the effect referred to in this paragraph is:(A) to obstruct the auditor in the exercise of any powers under this Part 3; or(B) to result in the rendering of the accounts of the LLCor the auditor's report materially misleading.