122. What are the private company's record keeping requirements?
The private company's record keeping requirements arise from the application of the general record keeping provisions.
The private company must keep records that:
- record and explain all transactions and other acts engaged in by the private company that are relevant for the purposes of the Income Tax Assessment Acts. This includes documents containing particulars of any calculations made and the method used to complete them
- enable its liability under the above Acts to be readily ascertained, and
- are in writing in English, or which are readily accessible and convertible into writing in English.
Unless the private company has gone into liquidation and been finally dissolved, the private company must retain the above records for five years after:
- the records were prepared or obtained, or
- the completion of the transactions or acts to which the records relate
whichever is the later.
Examples of records that the private company might need to retain include:
- journal and/or cash book entries recording and describing particular transactions, together with full explanations of the transactions being recorded
- agreements and other associated documentation, such as loan agreements and mortgage documentation in respect of loans made by the private company to its shareholders or shareholders' associates
- minutes of meetings of directors that record approval of payments or loans made to shareholders or shareholders' associates or debts forgiven
- calculations of minimum yearly repayment amounts
- calculations of amounts taken to be dividends and the private company's distributable surplus, and
- statements provided by the private company to its shareholders or shareholders' associates where that shareholder or associate is taken under Division 7A to have been paid a dividend and the amount of the dividend is reduced to accord with the private company's distributable surplus (see question 114 Distributable surplus).
(See section 262A.)