Some believe that preparing budgets and financial statements is limited to large companies only. However, the reality in Jordan is different. Applicable laws and regulations require a number of companies and entities to prepare annual financial statements, whether for legal, tax, or regulatory purposes.
Below is a clear and simplified explanation of the categories required to prepare financial statements in Jordan.
First: Companies Required to Prepare Financial Statements
The companies required to prepare financial statements in Jordan include the following types:
Second: Sole Proprietorships
A sole proprietorship is not considered a company under the Jordanian Companies Law and therefore is not subject to the same financial statement preparation requirements imposed on companies.
However, some sole proprietorships may be required to prepare financial information for tax or regulatory purposes, depending on the nature and size of the activity and the requirements of the competent authorities.
Third: Associations and Non-Profit Organizations
Non-profit entities required to prepare financial statements include:
- Officially registered associations
- Local and international non-profit organizations
Conclusion
The obligation to prepare financial statements in Jordan covers a wide range of companies and entities and is not limited to large corporations. Preparing financial statements is a fundamental element in organizing business activities, complying with applicable legislation, and enhancing transparency and trust.
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If it is unclear whether your activity is required to prepare financial statements, consulting accounting and auditing professionals helps ensure proper compliance and avoid any future legal or tax risks.
