Companies are required by Liberian law to maintain accounts and detailed records, the result of which, if not complied with, can often result in unusual, unreported, mis-reported or otherwise unnecessary costs causing complications with their activities, unpredictability and erroneous financial reporting. Well-devised accounting information systems, ensuring that relevant and reliable information is reported in financial statements can benefit just about every type of business organization.
Maintaining a set of accounting records is not optional, it’s a law! The Amendment to the Associations Law,(Amendment)approved in May 2016 essentially requires all corporations, limited liability companies, foreign corporation, foreign limited liability companies, partnership, limited partnerships and private foundations operating in Liberia, in effect states:1. Requirement For Keeping Accounting Records, Minutes, And Records Of Partners
(a) Accounting records. Every (domestic) limited partnership shall keep reliable and complete accounting records, to include correct and complete books and records of account. Accounting records must be sufficient to correctly explain all transactions, enable the financial position of the limited partnership to be determined with reasonable accuracy at any time, and allow financial statements to be prepared. Additionally, every domestic limited partnership shall keep underlying documentation for accounting records maintained pursuant to this subsection, such as, but not limited to, invoices and contracts, which shall reflect all sums of money received and expended and the matters in respect of which the receipt and expenditure takes place; all sales, purchases, and other transactions; and the assets and liabilities of the limited partnership. A (resident) domestic limited partnership (and other businesses) are required to keep all accounting records and underlying documentation as described in this subsection of the Amendment requires that businesses prepare and retain a set of records and documents that can be audited.The Liberia Revenue Code also requires that businesses compute taxable income by using some sort of common-sense accounting system that clearly reflects income. In addition, the Law requires public companies to maintain and retain detailed and accurate books, records, and accounts of transactions and dispositions of the assets.
Is your business entity still not compliant? McJames & Francis can help!
If the taxpayer/entity/businessperson simply decides to just ignore this requirement, it may be possible to get away with such omissions for the time being, but for how long? But what happens if the Liberia Revenue Authority examines your tax return requiring information on what you own? What does the business own? or, What are the legitimate business expenditures? Is the business compliant with applicable Law? Then what? -GOL then gets to do your accounting the way the government sees fit. And the government’s way can mean that your commercial entity (activities)may be required to pay more in taxes and that individually you may also be required to pay more and earlier taxes than you would have otherwise – that is the way it will have to be!Start-up support/New Business Entry
- Provide business entities on inception and newly formed businesses advice on evaluating growth plans, facilitating regulatory mandates, creating reporting structures, and developing internal policies, controls and systems.
- Certain unscrupulous parties have been known to take advantage of the businessperson/taxpayers where business proprietors and stakeholders that do not know compliance and filing requirements or who may not be aware of how much money is being made or spent. Remember, no matter how well-informed the representatives from any of unscrupulous entities appear to you, their intent is to take money away from you. Our professionals at McJames, will advise you on the complications of compliance and accounting and financial systems and on managing the regulatory zeal that may otherwise be used to get your business entity to accept calculations, levies and results that may be contrary to reality. To help Our clients achieve this, We provide:
- Financial Reporting
- Financial Management and Consulting Services
- Accounting Software Training Services
- General ledger maintenance and Monthly / Periodic financial reporting
- Comptroller, Accounting, Financial Analyst Services
- Write -up Services
- Tax Planning, Advisory and Compliance Services
- End of period accounting Services
- Finance Analysis
- Personal Financial Statement
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