Accounting and reporting requirements of the Close Corporations

Companies and businesses close (CCS) should consider the following: records showing the assets and liabilities, a register of assets, records that contain daily entries of all cash received and disbursed; records of all purchases credit sales and services received or rendered on credit, in sufficient detail to identify the nature of operations and stakeholders, to review the statements of annual accounts which will allow the value of the securities at the end of ' year to be determined and documents entries into the records.

A company must also maintain a register of members' contributions, a drawn-profits and revaluations of fixed assets and the amounts of loans to and from the members, in sufficient detail to identify the nature and purpose of individual transactions in a clear .

These records must be retained so as to provide the necessary measures against falsification and for facilitating the discovery of such falsification. A society that fails to keep records and accounts of any member who fails to take all reasonable steps to prevent falsification is guilty of an offense. However, if members entrusted with the task of keeping the accounting records or maintaining an internal control system to a 'competent and reliable person', this would be sufficient defense.

The financial year of a CC is its annual accounting period. A CC must specify the date of the end of its financial statement in its foundation. As is the case with other information in the founding declaration, the date of the end of the year can be changed by recording an amended declaration foundation.

Members of a company must, within a maximum of nine months after the end of each financial year, budgets are drawn up. The budget must be approved and signed by or on behalf of every member of society and must consist of a balance sheet accounting and the related notes and income statement or any similar financial statement, in which this form is adequate and any notes .

The financial statements should disclose separately the total amounts at the end of the financial year and any change in these amounts during the years of contributions by members of the United Nations, drawn profits, revaluation of fixed assets, the amounts of loans to members and the amounts of loans from members.

The Close Corporation Act does not require reporting or an auditor 'report and directors to not contain a timetable, which sets requirements for the preparation of financial statements of financial accounting. The financial reports of a CC must, in accordance with generally accepted accounting principles (GAAP) appropriate for the activities of the company, rather than presenting the state of affairs of the company at the end of the financial year in question and the results of its operations for the 'year.

In determining what constitutes generally accepted accounting principle for the activities of a particular society, the needs of its members and key users of financial statements must be taken into consideration.

Over the years the accounting practices in various economic and industrial environments have been developed so as to record and fairly present the transactions and events specific to these environments. In deciding what is 'fit for business', consideration should be given to business activities and management of the company and accounting practices generally accepted in the workplace of the company .......