Business entities need to adjust their capital, either by increase or decrease. Companies have many reasons to undertake this process. According to the provisions of the Companies Law No. 1 of 2016, its executive regulations as amended, licensed auditor should be engaged to issue reports related to the capital amendment/adjustment.
What are the regulations issued in the State of Kuwait governing the preparation of the capital adjustment reports?
Companies Law No. 1 of 2016, its executive regulations as amended
Are companies obliged to engage an independent auditor?
Article No. (11) of Law No. 1 of 2016 stipulates the following:
“in case the company’s capital, at its incorporation or at its capital increase, includes in-kind shares, these shares shall be evaluated by an audit firm approved by the Capital Markets Authority.”
The Executive Regulations of the Ministry of Commerce and Industry also stipulates that in the event of decreasing or increasing the capital of any commercial company, the auditor of the company shall issue a report on the capital movement and its impact on equity rights according to the company’s latest financial statements.
What are the business entities required to submit capital adjustment reports?
All types of business entities stated in Article No. 4 of the Companies Law, namely, a joint company, a simple partnership company, a partnership limited by shares, a joint venture company, a shareholding company, a limited liability company, and one-person company.
What are the governing references that the independent auditor should observe in the preparation of the capital amendment/ adjustment reports?
The independent auditor should adhere to the provisions of the relevant international standard on Related Services ISRS 4400 “Agreed Upon Procedures regarding Financial Information.”
The governing references for audit and review of the financial statements are
What is the added value to business entities from compliance with the regulator’s requirements?
Ensure compliance with laws, regulations, decisions and instructions issued by the Ministry of Commerce and Industry.
Ensure soundness and integrity of financial statements and information promoting the entity’s reputation and avoiding associated risks;
Why Baker Tilly to provide this service?
Baker Tilly is distinguished by specialist professional experience and offers the following characteristics carrying added values to our clients as follows:
- A global accounting firm operating the State of Kuwait
- The firm has licensed auditors registered in Ministry of Commerce & Industry’s Auditors Register
- The firm has licensed auditors registered with Capital Markets Authority
- Local experience under international umbrella
- Professional team with in-depth experience in providing assurance services
- Bilingual team
- Complete understanding of the relevant regulatory requirements