Federal Decree-Law No. (32) of 2021 on Commercial Companies requires every company in the UAE to keep accounting records that accurately show its financial position, and to keep them at its head office for at least five years from the end of its fiscal year. The company must also prepare annual financial statements comprising a balance sheet and a profit-and-loss account in accordance with international accounting standards.

The Obligation to Keep Accounting Records

The law provides that "every Company shall keep accounting records of its transactions to give a clear picture of its financial position at any specific point in time, and to enable the partners or shareholders to verify that the Company's accounts are being properly kept in accordance with the provisions of this Decree-Law." These records must be kept "at its headquarters for a period of at least five [5] years of the end of the fiscal year of the Company," and the company may keep an electronic copy of the original documents in accordance with guidelines set by a resolution of the Minister.

Appointing an Auditor and Preparing Annual Accounts

The law requires that "every joint stock company and limited liability company shall have one or more auditors to carry out an annual audit of its accounts," and other companies may also appoint an auditor. The company must accordingly "prepare annual financial accounts, including a balance sheet and a profit and loss account," and apply "international accounting standards and principles upon preparing its periodic and annual accounts, to give a clear and accurate picture of the profits and losses of the Company."

A Partner's or Shareholder's Right to Access the Accounts

The law grants every shareholder or partner an explicit right to follow their company's financial performance: based on a written request, they may "obtain a free copy of the last audited accounts and of the last report of its auditor and a copy of the accounts of the group if it is a holding company," and the company must respond to this request within ten days of the date of submission.

Length of the Company's Fiscal Year

The law sets the rules for calculating the fiscal year: every company must specify its fiscal year in its Articles of Association, provided the company's first fiscal year is no more than eighteen months and no less than six months, starting from the date the company is registered in the commercial register, with subsequent fiscal years running as consecutive twelve-month periods.

Electronic Copies of Documents

The law does not necessarily require keeping accounting records only in paper form; it expressly allows the company to "keep an electronic copy of the original documents and papers saved and maintained by the Company in accordance with the guidelines contained in a resolution of the Minister," letting accounting firms adopt digital archiving as long as they follow the relevant ministerial guidelines.

Why These Duties Matter for Accountants and Auditors

These provisions form the legal framework that an accounting or auditing firm relies on when preparing or reviewing the financial statements of its corporate clients in the UAE, whether regarding how long supporting documents must be kept, the applicable preparation standard, or partners' right to request copies of the audited accounts.

Legal References

For questions about your specific situation, you can ask the UAE Tax & Legislation Helper on Helpers, or consult a licensed chartered accountant.