The New York Arts & Cultural Affairs Law (Law) requires every issuer or other offeror of a theatrical production company (usually the producer) to keep accurate books and accounting records for every theatrical production. The requirements for keeping accurate books and accounting records are detailed in regulations adopted by the New York Attorney General.

Permanent books and accounting records must be maintained. Work sheets, entries in pencil, or anything of a temporary nature are inadequate. The regulations that automated records such as entries made by punch card are allowed, but the regulations do not address digitally recorded information. Presumably, computer files are deemed to be permanent records. The books and records must be organized so that all financial transactions are clearly and fully reflected.

All of the theatrical production company's books and records must be maintained from the time that syndication interests are offered, not just from the first expenditure of investor funds. The records must reflect when funds of any principal in the theatrical production company or any front money investors are reimbursed out of the proceeds of the offering or credited as investment units. Investors' capital contributions have to be entered in the books when received. The investor's name and address should be included in the entry.

At a minimum, permanent accounting books must contain the following:

(a) A cash receipts book

(b) A cash disbursement book

(c) A general journal

(d) A general ledger that includes cost distributions, weekly running income and expense distributions, and closing cost distributions

(e) Payroll records

(f) A house seat record that indicates the number of house seats and passes that have been allocated to the theatrical production company for each performance, the location of the seats and passes, the prices, the persons in the theatrical production company who are entitled to the house seats and passes and the persons who ultimately received the house seats and passes

• If a person in the theatrical production company who is entitled to house seats or passes uses them, he or she must sign a receipt.
• If a person in the theatrical production company who is entitled to house seats or passes receives money over and above the box office ticket price, the receipt must include a statement about how the excess money was used.
• If house seats or passes are not used by anyone connected with the production company, the house seat record must indicate whether they have been made available at the box office or to a ticket distributor, whether they were sold, the price obtained, and how the proceeds were used.

(g) Any subsidiary records that are necessary to prepare true, accurate, and complete financial reports such as bank statements, cancelled checks, bank deposit slips, theatre settlement statements, tax reports, invoices, bills, receipts, sales slips, contracts, and correspondence

The permanent accounting books and subsidiary records have to be maintained for at least two years after the last public performance of any production invested in, mounted, or developed. The permanent books and records must also be kept for at least two years from the date that the theatrical production company loses, terminates, or abandon its right to produce, develop, or invest in a show. Accurate books and accounting records for any subsidiary rights to a production must also be preserved for no less than two years after they are made.

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