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2013.10.29 - Belize: Duty to maintain accounting records and financial statements

 

Belize: On 9th October 2013, The Governor-General of Belize, Sir Colville N. Young, approved the Belize Accounting Records (Maintenance) Act 2013.

Unlike other jurisdictions such as the British Virgin Islands or the Seychelles, Belize regulates the standards of accounting records by a separate legislation act rather than simply a provision included in other laws. These specifically provide as follows:

  1. In accordance with Section 2 of the above Act, the accounting records include financial statements as well as supporting documentation relating to:
    1. the company’s assets and liabilities,
    2. all sums of money received and expended by the company,
    3. sales and purchases carried out by the company,
    4. other financial transactions of the company.

    Accordingly, “accounting records” mean the bank statements and documents that confirm all the transactions stated in them. These include the invoices, contracts and other documents that are common in preparing any financial statements as well as the financial statements themselves.
  2. The above accounting records must be kept for five years after the relevant business transactions have taken place or after the termination of particular relationship with the party of the contract. Documents may be kept at the office of the registered agent, or at another place within or outside Belize. In the latter case, the company must notify the registered agent of the place where the accounting records are kept. In the event of any change of such a place, the registered agent must be notified of such a new place, in writing, not later than within fourteen days.
  3. In any event, in accordance with Section 5 of the Act, records shall be stored “in a manner so that they are easily accessible within a reasonable time frame and readily available to comply with any court orders”. Failure to comply with this provision (namely if the above documentation is not available when it is requested), in accordance with Section 3(5) of the Act will result in a company being struck off from the register of enterprises.
  4. Additionally, in accordance with Section 7 of the Act, in the case of such an infringement, the official of the company may be fined up to an amount of USD10,000. Also, under these circumstances the license of the registered agent of such a company may be revoked, as, according to the law, it is the registered agent who has primary responsibility for availability of such documentation when it is requested.

International Overseas Services comments:

In comparison to other jurisdictions, the legislative act in Belize regulating the accounting records is much more rigid in terms of both possible fines and the possible revocation of the license of the registered agent. Moreover, so far Belize is the first classic offshore jurisdiction which decided to include a specific requirement for preparing financial statements within this provision. It therefore may be predicted that the provisions of keeping accounting records and preparing financial statements in Belize will be subject to a relatively high degree of control.

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