27. Application of Part 7

This Part does not apply in relation to a Limited Liability Partnership that is an Authorised Firm, Authorised Market Institution, Recognised non-AIFC Member or Recognised non-AIFC Market Institution under the AIFC Financial Services Framework Regulations.

28. Accounting Records of Limited Liability Partnerships

(1) A Limited Liability Partnership must keep Accounting Records that are sufficient to show and explain its transactions so as to:

• (a) disclose with reasonable accuracy the partnership’s financial position at any time; and
• (b) enable the members to ensure that any accounts prepared by the partnership under this Part comply with the requirements of these Regulations and the Rules.

(2) A Limited Liability Partnership must ensure that its Accounting Records are:

• (a) kept at the place in the AIFC that the members consider appropriate, except so far as the Rules otherwise require; and
• (b) preserved by the partnership for at least 6 years after the day they are created or, if the Rules prescribe another period, the other period; and
• (c) open to inspection by a member or Auditor of the partnership at all reasonable times; and
• (d) otherwise kept and maintained as required by the Rules.

(2-1) If a Limited Liability Partnership, for whatever reason, ceases to exist or ceases to be a Limited Liability Partnership within the meaning of these Regulations, the partners immediately before the Limited Liability Partnership ceases to exist or ceases to be a Limited Liability Partnership shall ensure that its Accounting Records are preserved for at least 6 years after the date of such cessation.

(3) Contravention of this section is punishable by a fine.

29. Financial years of Limited Liability Partnerships

(1) The first financial year of a Limited Liability Partnership starts on the day it is incorporated and lasts for the period not exceeding 18 months decided by the members.

(2) The second or any subsequent financial year starts at the end of the Limited Liability Partnership’s previous financial year and lasts for 12 months or the other period, which is within 7 days either shorter or longer than the 12 months, decided by the members.

30. Accounts of Limited Liability Partnerships

(1) The members of a Limited Liability Partnership must ensure that accounts are prepared for the partnership in relation to each financial year of the partnership and that the requirements of this section are complied with in relation to the accounts.

(2) The accounts must:

1. (a) be prepared in accordance with accounting principles or standards prescribed by the Rules or otherwise approved by the Registrar of Companies; and
2. (b) show a true and fair view of the profit or loss of the Limited Liability Partnership for the financial year and of the state of the partnership’s affairs at the end of the financial year; and
3. (c) comply with any other requirements of these Regulations and the Rules.

(3) Within 6 months after the end of the financial year, the accounts for the financial year must be:

1. (a) prepared and approved by all the members; and
2. (b) signed on their behalf by at least 1 of the members; and
3. (c) examined and reported on by an Auditor subject to section 31 below.

(4) The Limited Liability Partnership must file a copy of its accounts for the financial year, and the Auditor’s report on the accounts, if applicable, with the Registrar of Companies within 7 days after the day the accounts have been reported on by the Auditor.

(5) Contravention of this section is punishable by a fine.

31. Appointment of Auditors

(1) A Limited Liability Partnership must appoint an Auditor to examine and report on, in accordance with these Regulations and the Rules, the accounts prepared under section 30 (Accounts of Limited Liability Partnership), except for the Limited Liability Partnership with the annual turnover of not more than U.S. $5,000,000.

(2) A Person who is not an Auditor must not:

1. (a) consent to be appointed as an Auditor of a Limited Liability Partnership; or
2. (b) act as an Auditor of a Limited Liability Partnership; or
3. (c) prepare any report required by these Regulations and the Rules to be prepared by an Auditor.

(3) Contravention of subsection (2) is punishable by a fine.

(4) The appointment of a firm as an Auditor of a Company is taken to be an appointment of each Person who is a partner of the firm.

32. Auditor’s report to members

(1) A Limited Liability Partnership’s Auditor must make a report to the members on the accounts examined by the Auditor.

(2) The Auditor’s report must state:

• (a) whether, in the Auditor’s opinion, the accounts have been properly prepared in accordance with these Regulations and the Rules; and
• (b) in particular, whether the accounts give a true and fair view of the profit or loss of the Limited Liability Partnership for the financial year and of the state of the partnership’s affairs at the end of the financial year; and
• (c) any other matter or opinion required under these Regulations or the Rules.

(3) Contravention of this section is punishable by a fine.

33. Auditors’ Functions

(1) A Limited Liability Partnership’s Auditor must, in preparing a report in relation to accounts of the partnership, conduct the investigations necessary to enable the Auditor to form an opinion about the following matters:

• (a) whether proper Accounting Records have been kept by the partnership and proper returns adequate for the audit have been received from branches or offices not visited by the Auditor;
• (b) whether the partnership’s accounts are in agreement with the Accounting Records and returns;
• (c) whether the partnership’s accounts have been prepared in compliance with any applicable accounting principles or standards.

(2) Contravention of subsection (1) is punishable by a fine.

(3) If the Auditor is of the opinion that proper Accounting Records have not been kept, that proper returns adequate for the audit have not been received from branches or offices not visited by the Auditor, that the accounts are not in agreement with the Accounting Records and returns, or that the accounts do not comply with any applicable accounting principles or standards, the Auditor must state that opinion in the report.

(4) The Auditor has a right of access, at all reasonable times, to the Limited Liability Partnership’s Records, and is entitled to require from the partnership’s members all the information and explanations that the Auditor considers necessary, for the purposes of the audit.

(5) The 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 that concerns the Auditor.

(6) If the Auditor does not obtain all the information and explanations that the Auditor considers necessary for the purposes of the audit, the Auditor must state that fact in the report.

(7) Contravention of subsection (6) is punishable by a fine.

34. Resignation of Auditor etc.

(1) An Auditor of a Limited Liability Partnership may resign from office by depositing a Written notice to that effect, together with a statement under subsection (2), at the partnership’s registered office. The notice operates to bring the Auditor’s term of office to an end on the day the notice is deposited or, if a later date is stated in the notice, on that date. The partnership must give a copy of the notice to the Registrar of Companies.

(2) If an Auditor of a Limited Liability Partnership ceases to hold office for any reason, the Auditor must deposit at the partnership’s registered office:

• (a) a statement to the effect that there are no circumstances connected with the Auditor ceasing to hold office that the Auditor considers should be brought to the notice of the members or Creditors of the partnership; or
• (b) a statement of any circumstances mentioned in paragraph (a).

(3) If an Auditor of a Limited Liability Partnership deposits a statement under subsection (2)(b), the partnership must, within 14 days after the day the Auditor deposits the statement, send a copy of the statement to every member of the partnership.

(4) If an Auditor of a Limited Liability Partnership ceases to hold office for any reason, the partnership must, within 30 days after the day the Auditor ceases to hold office, appoint a replacement.

(5) Contravention of this section is punishable by a fine.

35. Cooperation with Auditors

(1) A Limited Liability Partnership, or a member of a Limited Liability Partnership, must not knowingly or recklessly:

• (a) make a statement, or give information, (whether orally, in a Document or any other way) to an Auditor of the partnership that is false or misleading in a material particular; or
• (b) give a Document to an Auditor of the partnership that is false or misleading in a material particular; or
• (c) withhold any information from an Auditor of the partnership if the withholding of the information makes information given by the partnership or member to the Auditor false or misleading in a material particular or likely to mislead or deceive the Auditor; or
• (d) conceal any information from the Auditor if the concealment is likely to mislead or deceive the Auditor.

(2) A Limited Liability Partnership, a member of a Limited Liability Partnership, or a Person acting under the direction or authority of a Limited Liability Partnership or member of a Limited Liability Partnership, must not, without reasonable excuse, engage in conduct if the partnership, member or Person knows, or ought to know, that the conduct could:

• (a) obstruct or hinder an Auditor of the partnership in the Exercise of the Auditor’s Functions; or
• (b) result in the partnership’s accounts or any aspect of the Auditor’s report being false or misleading in a material particular.

(3) Without limiting subsection (2), that subsection applies to the following conduct:

• (a) destroying or concealing a Document;
• (b) coercing, manipulating, misleading or improperly influencing the Auditor;
• (c) Failing to provide access to information or Documents required by the Auditor;
• (d) Failing to give any information or explanation to the Auditor that the partnership, member or Person is able to give;
• (e) Failing to give the Auditor any assistance in relation to the audit that the partnership, member or Person is required and able to give.

(4) Contravention of this section is punishable by a fine.