Section 11: Section 11: Accounting and Audit Requirements
Article 79 - Maintenance of Accounting Records
Every
LLC shall keep proper accountingRecords with respect to all sums of money received and expended by theLLC and all sales and purchases of goods and services and other transactions by theLLC and the assets andLiabilities of theLLC . Such accountingRecords , shall be sufficient to show and explain all transactions by theLLC and must be such as to:(1) disclose with reasonable accuracy the financial position of theLLC at any time; and(2) enable the directors to ensure that any accounts prepared by theLLC comply with the requirements of theseRegulations .Article 80 - Location of Accounting Records
(1) TheLLC's accountingRecords shall be:(A) kept at theLLC's registered office;(B) preserved by theLLC for 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 theLLC .(2) If anLLC fails to comply with Article 79 and Article 80(1), theLLC and everyOfficer is in contravention of theseRegulations .Amended (as from 5th April 2015). Article 81 - Financial year of an LLC
(1) The first financial year of anLLC starts 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 theLLC .(2) The second and any subsequent financial year shall start with the day immediately following the end of theLLC's previous financial year and end on the financial year end date in the next calendar year.(3) AnLLC may by notice in thePrescribed Form given to theCRO specify a new financial year end date having effect in relation to:(A) theLLC's current financial year and subsequent financial years; or(B) theLLC's previous financial year and all financial years subsequent to that previous financial yearwhere, anLLC'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 theLLC which 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) AnLLC's financial 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 everyLLC shall cause accounts to be prepared in relation to each financial year of theLLC which shall be in the English language and shall comprise or include:(A) financial statements set out in accordance withIFRS ,UK GAAP ,US GAAP or such other accounting principles and standards as may be prescribed in rules made by theQFC Authority ; and(B) such further information as may be required by theseRegulations , any rules made by theQFC Authority and theLLC's articles of association.(2) The accounts shall be prepared in accordance with accounting principles and standards prescribed in rules made by theQFC Authority and comply with any other requirements of theseRegulations or any rules made by theQFC Authority . The accounts shall show a true and fair view of the profit or loss of theLLC for the financial year in question and of the state of theLLC's affairs at the end of such financial year.(3) TheLLC's accounts 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 theLLC's auditors in accordance with theseRegulations and any rules made by theQFC Authority , such auditors' report to be written in the English language; and(C) laid before a meeting of theMembers together with a copy of the auditors' report.(5) TheLLC shall file with theCRO within 21 days after the meeting of theMembers before 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 anLLC that is aCollective Investment Fund .Amended (as from 5th April 2015). Article 83 - Provision of copy of accounts to Members
(1) AnyMember of anLLC is entitled, on demand and without charge, to be furnished with a copy of theLLC's latest audited accounts and auditor's report.(2) AnLLC shall comply with such a request within 7 days.(3) If anLLC fails to comply with Article 83(2), theLLC and everyOfficer is in contravention of theseRegulations .Amended (as from 5th April 2015). Article 84 - Publication of accounts
Any accounts published by an
LLC must be audited and a copy of the auditors' report must accompany the published accounts.Article 85 - Qualification of auditor
(1) AnLLC's auditor shall be an individual auditor or firm of auditors qualified to act as auditors in theQFC and approved by theQFC Authority to act as auditors forLLCs and otherCompanies and otherEntities incorporated or registered in theQFC and entered in a register of approved auditors which shall be maintained by theCRO .(2) An auditor shall be regarded as qualified and approved by theQFC Authority to act as an auditor in theQFC and shall be entitled to be entered in the register maintained by theCRO if that auditor meets the criteria for approval set out in rules made by theQFC 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 theRegulatory Authority pursuant to theFinancial Services Regulations .Article 86 - Appointment and removal of auditor
(1) AnLLC shall appoint one or more auditors or a firm of auditors who shall examine and report on theLLC's accounts in accordance with theseRegulations . Except as provided for in Article 86(6) and Article 88(4) theLLC shall give notice in writing to theCRO within 21 days of the first appointment and any subsequent change in auditor on thePrescribed Form together with thePrescribed Fee .(2) No person shall be appointed as auditor of anLLC who is anOfficer or employee of thatLLC or of anAffiliated Company or who is a partner, employer or employee of any suchOfficer or employee.(3) The directors of anLLC shall appoint the auditor of thatLLC for its first financial year. In subsequent financial years, anLLC shall 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 theMembers of theLLC in 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, theCRO may, on the application of anyMember , 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 anLLC may be removed by anOrdinary Resolution .(6) TheLLC shall as soon as reasonably practicable and in any event not later than 5 days after the passing of theOrdinary Resolution referred to in Article 86(5) file a copy of theOrdinary Resolution with theCRO in thePrescribed Form together with thePrescribed Fee and if anAuthorised Firm with theRegulatory Authority .Amended (as from 5th April 2015). Article 87 - Remuneration of auditor
(1) The remuneration of an auditor of anLLC appointed by theMembers shall be fixed by theMembers in general meeting or by the directors, if they are authorised to do so by theMembers , 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 theCRO under Article 86, theCRO shall also fix the remuneration to be paid by theLLC for its or their services.(3) There shall be stated in a note to anLLC's audited accounts the amount of the remuneration of theLLC's auditors in their capacity as such.Article 88 - Resignation of an auditor
(1) An auditor of anLLC may resign from office by depositing a notice in writing to that effect at theLLC's registered 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 theLLC's registered office:(A) a statement of any circumstances connected with his ceasing to hold office which he considers should be brought to the notice of theMembers or creditors of theLLC ; 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), theLLC shall within 21 days send a copy of the statement to each director andMember of theLLC .(4) TheLLC shall 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 theCRO in thePrescribed Form together with thePrescribed Fee and if anAuthorised Firm with theRegulatory Authority .Amended (as from 5th April 2015). Article 89 - Auditor's report to LLC
(1) AnLLC's auditor shall make a report to theLLC's Members on 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 theseRegulations ;(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 theseRegulations or rules made by theRegulatory Authority under theFinancial Services Regulations .Article 90 - Powers and duties of auditor
(1) AnLLC's auditor shall, in preparing a report in relation to the accounts of theLLC , carry out such investigations as will enable the auditor to form an opinion as to the following matters:(A) whether proper accountingRecords have been kept by theCompany and proper returns adequate for the audit have been received from offices or branches of theLLC not visited by the auditor;(B) whether theLLC's accounts are in agreement with such accountingRecords and returns; and(C) whether theLLC's accounts have been prepared in compliance with applicable accounting principles and standards.(2) If the auditor is of the opinion that proper accountingRecords have 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 accountingRecords and 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 anLLC's accounting and other books andRecords and is entitled to require from anLLC's Officers such 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 ofMembers and to be heard on any part of the business of the meeting which concerns the auditor.Article 91 - Auditor's right to information
An
LLC , and anyMember ,Officer , employee or agent of theLLC , shall not knowingly or recklessly make to theLLC's auditor 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 theLLC and is false, misleading or deceptive in a material particular.Article 92 - Obstruction of auditor
(1) AnLLC , or anyOfficer of anLLC , or any person acting under the direction or authority of such anLLC orOfficer , shall not engage in conduct, including without limitation the:(A) destruction or concealment ofDocuments ;(B) coercion, manipulation, misleading, or influencing of the auditor;(C) failure to provide access to information orDocuments specified by the auditor; or(D) failure to give any information or explanation which the person is able to givewhere theLLC ,Officer or 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 theLLC or the auditor's report materially misleading.