Opening balance is one of the founding documents you can set up when starting a Proprietary Limited Company. The document provides an overview of assets, equity, and liabilities in a limited liability company at the start. It shows what the company owns and owes.
You do not need anyone to approve the opening balance, but the bank, your accountant, or an auditor must approve that the money stated in the opening balance is actually in the account.
What does the opening balance contain?
For many, the opening balance will only consist of share capital. If you only have cash deposits when starting up, the bank or an accountant can approve the opening balance.
However, if you are bringing in objects, property, or similar as part of the share capital, also known as non-cash contributions, the opening balance must be approved by an auditor.