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Boring Legal/Accounting/Audit question to settle a bet

Discussion in 'BBS Hangout' started by Mathloom, May 11, 2011.

?

Which one?

  1. a) authorities' responsibility

    2 vote(s)
    40.0%
  2. b) company's responsibility

    3 vote(s)
    60.0%
  1. Mathloom

    Mathloom Shameless Optimist

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    Yes, it is the most boring topic ever created, but I've made a wager and have some money riding on the results of this poll. Summary in bold.

    Let's say you're in a jurisdiction where you must be licensed to operate.

    Now when people apply for this license, they are usually brand new legal entities or brand new branches. In both these cases, the newly established company does not have a historical record, and its record starts from scratch.

    Now let's say there's a company which was registered but never started operating, therefore it did not require a license previously. A few years down the road, the company decides to beging operating and applies for a license. However, this company might have material accounting/auditing/legal history which may or may not have been accurately recorded, if at all.

    The licensing commission/authority says the company needs to establish a new company because the commission/authority itself does not have the ability to "draw a line in the sand" time-wise regarding legal/accounting/audit history. Setting up a company costs money, and companies don't want to just throw money around.

    Question: Who's responsibility is it to take action?

    a) The commission/authority should be capable of handling this kind of situation without imposing these costs on the company.

    b) It's the company's responsibility to satisfy the commission/authority by setting up a new company.
     
  2. Joe Joe

    Joe Joe Go Stros!
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    Without knowing the specifics of this profession, it sounds like the company's historical accounting practice may be the block for the license. It was not the commission's responsibility to have kept records. Company seems to be at fault and holds all responsibility to fix problem. It sounds like the licensing authority is providing advice on how to fix problem that doesn't require time travel.
     
  3. Joe Joe

    Joe Joe Go Stros!
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    Without knowing license requirements, there may be another way to fix problem, but it should still fall on the company to repair this issue.
     

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