Reaching out to clients and assisting them with their corporate annual maintenance is an important step to ensure that a client’s company records remain up to date—not to mention, it also helps the lawyer build and grow a strong relationship with that client. Another party that you may start to develop a relationship with is the client’s accountant. This article talks about the information a lawyer will want to gather from a client’s accountant when carrying out annual maintenance.
As corporate annual maintenance requires you to record information on the financial statements from the previous fiscal year, lawyers often communicate with the client’s accountant directly to gather the required information. So, what information should the lawyer ask for?
Here is a list of the most common information required from an accountant when carrying out annual maintenance for a corporate client:
- Confirm that the financial statements for the previous fiscal year end have been completed;
- Confirm the FYE date of the corporation, if this is something that the lawyer doesn’t have on file;
- The date on the Engagement Report of the financial statements (and specify if the report was a Review Engagement Report, Compilation Engagement Report, or Audit Engagement Report). Lawyers typically do not need to see the report themselves, they just need to get confirmation of that date.
- Were there any dividends declared? If yes:
- The date of declaration;
- The class, or classes, of shares that the dividends were declared on;
- The total dollar amount of the dividend;
- The dollar amount per share;
- The payment method;
- The payment date;
- Whether they are eligible or non-eligible dividends;
- Whether they are from the capital dividends account.
- Were management bonuses paid out? If Yes:
- To whom was the bonus paid to;
- How much was the bonus for;
- Payment method;
- Date it was paid or is to be paid out by.
- Have shares been redeemed? If yes:
- What class of shares was redeemed, and how many?
- The date the shares were redeemed;
- The total redemption amount, and whether or not that redemption amount will be designated as an eligible dividend;
- Any other information the accountant feels needs to be shared.
There may be other questions to ask, or information received, depending on the corporation, but the above is a very typical list of information that a lawyer would need from an accountant in order to carry out corporate annual maintenance for their client. It is also good practice, once the Annual Maintenance is complete, to share a copy of the documents with the Client’s accountant for their records. Alternatively, if the lawyer uses a platform such as Tobuso, they can give the accountant “Viewing Access” to the client’s corporate records, so that they are available for the accountant to view at any time (so long as the client has given them permission to do so).
We hope this article was insightful and helpful. If you want to learn more about corporate annual maintenance, check out this article, or contact us today!
