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  • Section 11: Section 11: Accounting and Audit Requirements

    • Article 79 - Maintenance of Accounting Records

      Every LLC shall keep proper accounting Records with respect to all sums of money received and expended by the LLC and all sales and purchases of goods and services and other transactions by the LLC and the assets and Liabilities of the LLC. Such accounting Records, shall be sufficient to show and explain all transactions by the LLC and must be such as to:

      (1) disclose with reasonable accuracy the financial position of the LLC at any time; and
      (2) enable the directors to ensure that any accounts prepared by the LLC comply with the requirements of these Regulations.

    • Article 80 - Location of Accounting Records

      (1) The LLC's accounting Records shall be:
      (A) kept at the LLC's registered office;
      (B) preserved by the LLC 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 the LLC.
      (2) If an LLC fails to comply with Article 79 and Article 80(1), the LLC and every Officer is 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 LLC 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 the LLC.
      (2) The second and any subsequent financial year shall start with the day immediately following the end of the LLC's previous financial year and end on the financial year end date in the next calendar year.
      (3) An LLC may by notice in the Prescribed Form given to the CRO specify a new financial year end date having effect in relation to:
      (A) the LLC's current financial year and subsequent financial years; or
      (B) the LLC's previous financial year and all financial years subsequent to that previous financial year
      where, 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 LLC 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) An LLC'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 every LLC shall cause accounts to be prepared in relation to each financial year of the LLC which shall be in the English language and shall comprise or include:
      (A) financial statements set out in accordance with IFRS, UK GAAP, US GAAP or 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 Authority and the LLC's articles of association.
      (2) The accounts shall be prepared in accordance with accounting principles and standards prescribed in rules made by the QFC Authority and comply with any other requirements of these Regulations or any rules made by the QFC Authority. The accounts shall show a true and fair view of the profit or loss of the LLC for the financial year in question and of the state of the LLC's affairs at the end of such financial year.
      (3) The LLC'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 the LLC's auditors in accordance with these Regulations and 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 Members together with a copy of the auditors' report.
      (5) The LLC shall file with the CRO within 21 days after the meeting of the Members 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 an LLC that is a Collective Investment Fund.
      Amended (as from 5th April 2015).

    • Article 83 - Provision of copy of accounts to Members

      (1) Any Member of an LLC is entitled, on demand and without charge, to be furnished with a copy of the LLC's latest audited accounts and auditor's report.
      (2) An LLC shall comply with such a request within 7 days.
      (3) If an LLC fails to comply with Article 83(2), the LLC and every Officer is in contravention of these Regulations.
      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) An LLC's auditor shall be an individual auditor or firm of auditors qualified to act as auditors in the QFC and approved by the QFC Authority to act as auditors for LLCs and other Companies and other Entities incorporated or registered in the QFC and 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 Authority to act as an auditor in the QFC and shall be entitled to be entered in the register maintained by the CRO if 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 Authority pursuant to the Financial Services Regulations.

    • Article 86 - Appointment and removal of auditor

      (1) An LLC shall appoint one or more auditors or a firm of auditors who shall examine and report on the LLC's accounts in accordance with these Regulations. Except as provided for in Article 86(6) and Article 88(4) the LLC shall give notice in writing to the CRO within 21 days of the first appointment and any subsequent change in auditor on the Prescribed Form together with the Prescribed Fee.
      (2) No person shall be appointed as auditor of an LLC who is an Officer or employee of that LLC or of an Affiliated Company or who is a partner, employer or employee of any such Officer or employee.
      (3) The directors of an LLC shall appoint the auditor of that LLC for its first financial year. In subsequent financial years, an LLC 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 the Members of the LLC 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, the CRO may, 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 LLC may be removed by an Ordinary Resolution.
      (6) The LLC shall as soon as reasonably practicable and in any event not later than 5 days after the passing of the Ordinary Resolution referred to in Article 86(5) file a copy of the Ordinary Resolution with the CRO in the Prescribed Form together with the Prescribed Fee and if an Authorised Firm with the Regulatory Authority.
      Amended (as from 5th April 2015).

    • Article 87 - Remuneration of auditor

      (1) The remuneration of an auditor of an LLC appointed by the Members shall be fixed by the Members in 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 CRO under Article 86, the CRO shall also fix the remuneration to be paid by the LLC for its or their services.
      (3) There shall be stated in a note to an LLC's audited accounts the amount of the remuneration of the LLC's auditors in their capacity as such.

    • Article 88 - Resignation of an auditor

      (1) An auditor of an LLC may resign from office by depositing a notice in writing to that effect at the LLC'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 the LLC'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 the Members or 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 LLC shall within 21 days send a copy of the statement to each director and Member of the LLC.
      (4) The LLC 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 the CRO in the Prescribed Form together with the Prescribed Fee and if an Authorised Firm with the Regulatory Authority.
      Amended (as from 5th April 2015).

    • Article 89 - Auditor's report to LLC

      (1) An LLC's auditor shall make a report to the LLC'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 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 Regulations or rules made by the Regulatory Authority under the Financial Services Regulations.

    • Article 90 - Powers and duties of auditor

      (1) An LLC's auditor 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 Records have been kept by the Company and proper returns adequate for the audit have been received from offices or branches of the LLC not visited by the auditor;
      (B) whether the LLC's accounts are in agreement with such accounting Records and returns; and
      (C) whether the LLC's accounts have been prepared in compliance with applicable accounting principles and standards.
      (2) If the auditor is of the opinion that proper accounting Records 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 accounting Records 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 an LLC's accounting and other books and Records and is entitled to require from an LLC'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 of Members 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 any Member, Officer, employee or agent of the LLC, shall not knowingly or recklessly make to the LLC'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 the LLC and is false, misleading or deceptive in a material particular.

    • Article 92 - Obstruction of auditor

      (1) An LLC, or any Officer of an LLC, or any person acting under the direction or authority of such an LLC or 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 Documents specified by the auditor; or
      (D) failure to give any information or explanation which the person is able to give
      where the LLC, 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 the LLC or the auditor's report materially misleading.