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Puerto Rico Accounting Rules and Laws

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You are asked to consult a friend who is opening a business in Puerto Rico. Your friend is unfamiliar with the accounting rules and laws that he or she must follow.

Discuss the accounting laws that will be relevant to your friend's business. Refer to www.michie.com/puertorico for information about Puerto Rico accounting laws. Provide reasoning as to why the laws are important and how they might affect the business, especially if they are ignored. You may choose the type of business (retail, manufacturing, etc) that your friend will be opening, but assume that it will be organized as a corporation.

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The solution discusses Puerto Rico accounting rules and laws.

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Please find guidelines and ideas for Accounting Laws Memo in the attached file.

To: XYZ
From: ABC
Date: 30th October 2010
Subject: Accounting Laws in Puerto Rico
It is necessary for all persons, who want to establish a business in Puerto Rico that they make a request to the directors. It is important that all relevant certificates are acquired by the business such as, certificate from departments of treasury, labor and human resources, state insurance fund and municipal revenues collection center etc. (Michele's Legal Resources, 2010). Some business are exempted from these arrangements that are described in § 6014 (a) of this title, so, it is necessary for these businesses that they also provide certificate on this matter.
If XYZ establishes its business as a trust company, then it is necessary for him that he confirms the method of book keeping that is according to the Secretary of the Treasury of Puerto Rico. It is necessary for the trust company to make an exact account or keep appropriate book for any payment to court. It includes all records such as, court name, title case and amount money (Michele's Legal Resources, 2010). Without approval, a trust company cannot use its books for another business. Securities that are purchased by trust company must be entered on the basis of actual cost in books (Michele's Legal Resources, 2010).
Puerto Rico law says that if a company develops its branches outside the ...

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