Accounting

Legal Obligations under the Companies Act 2016

The Companies Act 2016 (Act 777) sets out detailed obligations for companies to maintain accurate records and prepare financial statements that reflect a true and fair view of their financial position. These duties fall primarily on directors and must be fulfilled within specified timelines.

A. Recordkeeping Requirements

Obligation	Details	Legal Reference
Maintain Accounting Records	Must record and explain transactions and the company’s financial position	Section 245(1)
Retention Period	Records must be retained for at least 7 years	Section 245(3)
Location of Records	Must be kept at the registered office or another notified location	Section 245(4)

B. Preparation of Financial Statements

Obligation	Details	Legal Reference
Initial Financial Statements	Must be prepared within 18 months from the date of incorporation	Section 248(1)(a)
Annual Financial Statements	Must be prepared within 6 months after each financial year-end	Section 248(1)(b)
Approval of Statements	Must be approved by board resolution prior to circulation or lodgement	Section 251(1)
Compliance with Standards	Must comply with MASB-approved accounting standards	Section 244

C. Submission & Lodgement

Obligation	Details	Legal Reference
Circulation to Members	Financial statements must be circulated to members before lodgement	Section 258(1)
Lodgement with Registrar (SSM)	Must lodge financial statements with the Registrar within 30 days of circulation	Section 259(1)

D. Director Responsibilities & Penalties

Responsibility / Offence	Details	Legal Reference
Duty to Ensure Compliance	Directors are personally responsible for ensuring compliance with all accounting provisions	Section 247(1)
Offence for Non-Compliance	Failure to prepare or lodge financial statements may result in fines or disqualification	Section 259(3)

How This Affects Your Business

Accounting obligations under the Companies Act are non-negotiable. Directors must ensure that records are accurate, up-to-date, and maintained in the correct format to support statutory filings and audits.

Common issues businesses face include:

Backlogged bookkeeping or missing records,
Confusion over MASB compliance and formatting,
Delayed preparation of financial statements,
Missed deadlines for circulation and lodgement,
Risk of director liability for non-compliance.

Failure to manage these responsibilities can result in penalties, audit delays, or reputational damage with regulators, partners, or banks.

How We Can Help

We offer full-spectrum accounting support—whether you’re a growing business, a dormant entity catching up, or a director unsure of your obligations.

Our services include:

Bookkeeping & Transactional Accounting
Detailed, timely recording of all financial activity to support compliant reporting.
Preparation of Financial Statements
We structure your reports according to MASB standards and Companies Act formats.
Catch-Up & Clean-Up Services
Fixing incomplete or inconsistent records—especially before audits or deadlines.
Lodgement Support
We assist with submission to SSM under Section 259, including director approvals and formatting.
Compliance Advisory
Helping directors understand their duties under Sections 244–259, and avoid risks of disqualification.