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2. What accounting books and records a proprietary limited (Pty Ltd) company should maintain?


Companies registered as proprietary companies (Pty Ltd) with Australian securities and Investment commission (ASIC) are required to maintain accounting records to record all the accounting and financial transactions accurately. The records must be preserved for a minimum period of seven years.

 

As per Section 286(1) of the Corporation Act a company must keep written financial records that correctly record and explain its transactions and financial position and performance and would enable true and fair financial statements to be prepared and audited.

 

Do you need to get accounting Records audited?

A proprietary company which is a small proprietary company, the financial records need not be audited. A small proprietary company is one which satisfies the following main conditions:

 

  • The total revenue of the company including the group companies during the financial year which it controls does not exceed $25 Million;
  • The Gross assets of the company and the company it controls does not exceed $12.5 Million;
  • The company and the entities it controls have less than 50 employees at the end of the financial year.

 

 

What are financial and accounting records?

 Financial records required will vary from company to company depending on its size and character. It is advised to consult a Financial Advisor or Accountant before implementing any accounting system. These recording accounting systems can be manual or electronic, including an accounting software package. Further, there could be other legislative record keeping requirements, such as workers compensation, Superannuation legislation etc. The below list of records is by no means exhaustive:

 

  • General Ledger, Journals, Purchase & Creditors records & Sales & Debtors Ledger;
  • Cash and Bank records, Bank reconciliation statements, payroll and wages records;
  • Financial Statements such as Profit &loss account, Balance sheet;
  • Depreciation schedules and Taxation returns lodged with ATO;
  • Tax, superannuation, fringe benefit tax, business activity statements and all supporting documents such as tax invoices.

 

You must also keep records of all correspondence with ASIC and other statutory authorities. Corporate secretarial records such as Register of Members, Debenture holders, charges & Minutes of Meetings of Directors and or Members

 



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