Need partnership accounts certified?

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Hey there,

I have a property business and i am applying for a loan through my business partnership. The bank would like to see certified partnership accounts? My accountant only prepares tax returns for me. What are certified partnership accounts anyway?

Thanks

 

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By paul.benny
31st Jul 2019 12:40

You could try asking your accountant. Or is that a bit obvious? S/he might even certify your accounts for you.

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By raj1234
31st Jul 2019 12:48

.

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By LostinSuspense
31st Jul 2019 12:51

Does your accountant not prepare supporting paperwork showing a detailed summary of income and expenses for the year for the partnership including the relevant split between the partners? This report should also show the present balance of any fixed assets (cars, computers, machinery) and any money the partnership owes / is owed.

If they do, then chances are it is this report the bank wants.

I assume you have a signed partnership agreement as well? You might want a copy available in case the bank asks for it.

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By raj1234
31st Jul 2019 12:53

You will probably need an accountant to produce the accounts for you? Then they can certify them.

Who prepares the accounts in order to do the tax returns?

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Replying to raj1234:
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By lionofludesch
31st Jul 2019 13:12

Who prepares the accounts for you and your partner to review and see how successful/disastrous your trading year has been ?

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By adam.arca
31st Jul 2019 13:14

I think in all fairness to the OP, this could equally be the bank being daft and going through their checklist with brain disengaged (as usual).

If the business is literally just property rental and it's of no great scale, then it could well be the case that the accountant hasn't seen the need to prepare full accounts.

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paddle steamer
By DJKL
31st Jul 2019 13:14

Quite surprised they really want these, it may be their knee jerk "ask for" rather than really "needed"

I am struggling to see re their security position what their being certified adds; usually knowing property values and ERV from the red book valuation, taken with the loan totals and loan amortisation profile is sufficient to work out if a lending position is tenable.

We have a partnership as one of our property business entities and our banks do not blink that I produce the accounts in house and that is what they get given, both re the original loan request presentation back in 2016 and our ongoing annual accounts I send them each year.
(we do not use external accountants)

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By lionofludesch
31st Jul 2019 13:26

Copy of the partnership tax return, perhaps ?

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By fawltybasil2575
31st Jul 2019 13:53

@ Anonymous (OP).

It would assist if you could:-

(i) Give some broad indication of the “property business” (eg. “Two terraced houses with a combined market value of £250,000, with repayment mortgages showing balances owing on each of £20,000, the monthly repayments being £500 each, due to be repaid in 2024)”; and

(ii) Advise the quantum of the bank loan applied for and the purpose thereof (and say whether the loan applied for is with a bank/other lender with which one of the mortgages is held).

Without fuller details (this implies no criticism of your question) it is not possible to assess whether the prospective lender (i) will be satisfied with informal documentation, or (ii) whether alternatively you will be required to provide (to the bank) formal Partnership Accounts “certified” by your accountant [which may or may not be easy/cost-effective to produce “after the event”].

It does frequently happen that, as you state applies in your case, the accountant “does the bare minimum”, so as to reduce costs, in simply entering Rental Income and Expenses figures on Tax Returns, perhaps not envisaging that more formal “Financial Statements” may be required later, whether for bank lending or other purposes.

I am assuming, as I think other eminent posters above have also probably assumed, that the "property business" and the "business partnership" are one and the same.

In short, whether your "next step" should be to approach (i) your accountant or (ii) your bank, is not possible without your further input, please.

Basil.

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ALISK
By atleastisoundknowledgable...
01st Aug 2019 08:40

I’m leaning towards: the OP is in a trading partnership and wants to raise finance for a new (to be owned individually, maybe as a personal portfolio) BTL. Bank have seen his/her SATR has partnership income and have asked to see the accounts.

I think ‘property business’ and ‘business partnership’ are separate things.

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Replying to atleastisoundknowledgable...:
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By paul.benny
01st Aug 2019 08:51

Quote:

I think ‘property business’ and ‘business partnership’ are separate things.

You may be right. But we don't know, because the op hasn't (yet) bothered to come back and participate in the discussion.

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