Office of Public Sector Information
PART I continued
(1) The directors' report shall be approved by the board of directors and signed on behalf of the board by a director or the secretary of the company.
(2) Every copy of the directors' report which is laid before the company in general meeting, or which is otherwise circulated, published or issued, shall state the name of the person who signed it on behalf of the board.
(3) The copy of the directors' report which is delivered to the registrar shall be signed on behalf of the board by a director or the secretary of the company.
(4) If a copy of the directors' report—
(a) is laid before the company, or otherwise circulated, published or issued, without the report having been signed as required by this section or without the required statement of the signatory’s name being included, or
(b) is delivered to the registrar without being signed as required by this section,
the company and every officer of it who is in default is guilty of an offence and liable to a fine.”.
(2) Schedule 7 to the [1985 c. 6.] Companies Act 1985 (matters to be included in directors' report) is amended in accordance with Schedule 5 to this Act.
The following sections are inserted in Part VII of the [1985 c. 6.] Companies Act 1985—
(1) A company’s auditors shall make a report to the company’s members on all annual accounts of the company of which copies are to be laid before the company in general meeting during their tenure of office.
(2) The auditors' report shall state whether in the auditors' opinion the annual accounts have been properly prepared in accordance with this Act, and in particular whether a true and fair view is given—
(a) in the case of an individual balance sheet, of the state of affairs of the company as at the end of the financial year,
(b) in the case of an individual profit and loss account, of the profit or loss of the company for the financial year,
(c) in the case of group accounts, of the state of affairs as at the end of the financial year, and the profit or loss for the financial year, of the undertakings included in the consolidation as a whole, so far as concerns members of the company.
(3) The auditors shall consider whether the information given in the directors' report for the financial year for which the annual accounts are prepared is consistent with those accounts; and if they are of opinion that it is not they shall state that fact in their report.
(1) The auditors' report shall state the names of the auditors and be signed by them.
(2) Every copy of the auditors' report which is laid before the company in general meeting, or which is otherwise circulated, published or issued, shall state the names of the auditors.
(3) The copy of the auditors' report which is delivered to the registrar shall state the names of the auditors and be signed by them.
(4) If a copy of the auditors' report—
(a) is laid before the company, or otherwise circulated, published or issued, without the required statement of the auditors' names, or
(b) is delivered to the registrar without the required statement of the auditors' names or without being signed as required by this section,
the company and every officer of it who is in default is guilty of an offence and liable to a fine.
(5) References in this section to signature by the auditors are, where the office of auditor is held by a body corporate or partnership, to signature in the name of the body corporate or partnership by a person authorised to sign on its behalf.
(1) A company’s auditors shall, in preparing their report, carry out such investigations as will enable them to form an opinion as to—
(a) whether proper accounting records have been kept by the company and proper returns adequate for their audit have been received from branches not visited by them, and
(b) whether the company’s individual accounts are in agreement with the accounting records and returns.
(2) If the auditors are of opinion that proper accounting records have not been kept, or that proper returns adequate for their audit have not been received from branches not visited by them, or if the company’s individual accounts are not in agreement with the accounting records and returns, the auditors shall state that fact in their report.
(3) If the auditors fail to obtain all the information and explanations which, to the best of their knowledge and belief, are necessary for the purposes of their audit, they shall state that fact in their report.
(4) If the requirements of Schedule 6 (disclosure of information: emoluments and other benefits of directors and others) are not complied with in the annual accounts, the auditors shall include in their report, so far as they are reasonably able to do so, a statement giving the required particulars.”.
The following sections are inserted in Part VII of the [1985 c. 6.] Companies Act 1985—
(1) A copy of the company’s annual accounts, together with a copy of the directors' report for that financial year and of the auditors' report on those accounts, shall be sent to—
(a) every member of the company,
(b) every holder of the company’s debentures, and
(c) every person who is entitled to receive notice of general meetings,
not less than 21 days before the date of the meeting at which copies of those documents are to be laid in accordance with section 241.
(2) Copies need not be sent—
(a) to a person who is not entitled to receive notices of general meetings and of whose address the company is unaware, or
(b) to more than one of the joint holders of shares or debentures none of whom is entitled to receive such notices, or
(c) in the case of joint holders of shares or debentures some of whom are, and some not, entitled to receive such notices, to those who are not so entitled.
(3) In the case of a company not having a share capital, copies need not be sent to anyone who is not entitled to receive notices of general meetings of the company.
(4) If copies are sent less than 21 days before the date of the meeting, they shall, notwithstanding that fact, be deemed to have been duly sent if it is so agreed by all the members entitled to attend and vote at the meeting.
(5) If default is made in complying with this section, the company and every officer of it who is in default is guilty of an offence and liable to a fine.
(6) Where copies are sent out under this section over a period of days, references elsewhere in this Act to the day on which copies are sent out shall be construed as references to the last day of that period.
(1) Any member of a company and any holder of a company’s debentures is entitled to be furnished, on demand and without charge, with a copy of the company’s last annual accounts and directors' report and a copy of the auditors' report on those accounts.
(2) The entitlement under this section is to a single copy of those documents, but that is in addition to any copy to which a person may be entitled under section 238.
(3) If a demand under this section is not complied with within seven days, the company and every officer of it who is in default is guilty of an offence and liable to a fine and, for continued contravention, to a daily default fine.
(4) If in proceedings for such an offence the issue arises whether a person had already been furnished with a copy of the relevant document under this section, it is for the defendant to prove that he had.
(1) If a company publishes any of its statutory accounts, they must be accompanied by the relevant auditors' report under section 235.
(2) A company which is required to prepare group accounts for a financial year shall not publish its statutory individual accounts for that year without also publishing with them its statutory group accounts.
(3) If a company publishes non-statutory accounts, it shall publish with them a statement indicating—
(a) that they are not the company’s statutory accounts,
(b) whether statutory accounts dealing with any financial year with which the non-statutory accounts purport to deal have been delivered to the registrar,
(c) whether the company’s auditors have made a report under section 235 on the statutory accounts for any such financial year, and
(d) whether any report so made was qualified or contained a statement under section 237(2) or (3) (accounting records or returns inadequate, accounts not agreeing with records and returns or failure to obtain necessary information and explanations);
and it shall not publish with the non-statutory accounts any auditors' report under section 235.
(4) For the purposes of this section a company shall be regarded as publishing a document if it publishes, issues or circulates it or otherwise makes it available for public inspection in a manner calculated to invite members of the public generally, or any class of members of the public, to read it.
(5) References in this section to a company’s statutory accounts are to its individual or group accounts for a financial year as required to be delivered to the registrar under section 242; and references to the publication by a company of “non-statutory accounts” are to the publication of—
(a) any balance sheet or profit and loss account relating to, or purporting to deal with, a financial year of the company, or
(b) an account in any form purporting to be a balance sheet or profit and loss account for the group consisting of the company and its subsidiary undertakings relating to, or purporting to deal with, a financial year of the company,
otherwise than as part of the company’s statutory accounts.
(6) A company which contravenes any provision of this section, and any officer of it who is in default, is guilty of an offence and liable to a fine.”.
The following sections are inserted in Part VII of the [1985 c. 6.] Companies Act 1985—
(1) The directors of a company shall in respect of each financial year lay before the company in general meeting copies of the company’s annual accounts, the directors' report and the auditors' report on those accounts.
(2) If the requirements of subsection (1) are not complied with before the end of the period allowed for laying and delivering accounts and reports, every person who immediately before the end of that period was a director of the company is guilty of an offence and liable to a fine and, for continued contravention, to a daily default fine.
(3) It is a defence for a person charged with such an offence to prove that he took all reasonable steps for securing that those requirements would be complied with before the end of that period.
(4) It is not a defence to prove that the documents in question were not in fact prepared as required by this Part.
(1) The directors of a company shall in respect of each financial year deliver to the registrar a copy of the company’s annual accounts together with a copy of the directors' report for that year and a copy of the auditors' report on those accounts.
If any document comprised in those accounts or reports is in a language other than English, the directors shall annex to the copy of that document delivered a translation of it into English, certified in the prescribed manner to be a correct translation.
(2) If the requirements of subsection (1) are not complied with before the end of the period allowed for laying and delivering accounts and reports, every person who immediately before the end of that period was a director of the company is guilty of an offence and liable to a fine and, for continued contravention, to a daily default fine.
(3) Further, if the directors of the company fail to make good the default within 14 days after the service of a notice on them requiring compliance, the court may on the application of any member or creditor of the company or of the registrar, make an order directing the directors (or any of them) to make good the default within such time as may be specified in the order.
The court’s order may provide that all costs of and incidental to the application shall be borne by the directors.
(4) It is a defence for a person charged with an offence under this section to prove that he took all reasonable steps for securing that the requirements of subsection (1) would be complied with before the end of the period allowed for laying and delivering accounts and reports.
(5) It is not a defence in any proceedings under this section to prove that the documents in question were not in fact prepared as required by this Part.
(1) Where the requirements of section 242(1) are not complied with before the end of the period allowed for laying and delivering accounts and reports, the company is liable to a civil penalty.
This is in addition to any liability of the directors under section 242.
(2) The amount of the penalty is determined by reference to the length of the period between the end of the period allowed for laying and delivering accounts and reports and the day on which the requirements are complied with, and whether the company is a public or private company, as follows:—
| Length of period | Public company | Private company |
|---|---|---|
| Not more than 3 months. | £500 | £100 |
| More than 3 months but not more than 6 months. | £1,000 | £250 |
| More than 6 months but not more than 12 months. | £2,000 | £500 |
| More than 12 months. | £5,000 | £1,000 |
(3) The penalty may be recovered by the registrar and shall be paid by him into the Consolidated Fund.
(4) It is not a defence in proceedings under this section to prove that the documents in question were not in fact prepared as required by this Part.
(1) The following provisions apply where at the end of the financial year a parent company has as a subsidiary undertaking—
(a) a body corporate incorporated outside Great Britain which does not have an established place of business in Great Britain, or
(b) an unincorporated undertaking,
which is excluded from consolidation in accordance with section 229(4) (undertaking with activities different from the undertakings included in the consolidation).
(2) There shall be appended to the copy of the company’s annual accounts delivered to the registrar in accordance with section 242 a copy of the undertaking’s latest individual accounts and, if it is a parent undertaking, its latest group accounts.
If the accounts appended are required by law to be audited, a copy of the auditors' report shall also be appended.
(3) The accounts must be for a period ending not more than twelve months before the end of the financial year for which the parent company’s accounts are made up.
(4) If any document required to be appended is in a language other than English, the directors shall annex to the copy of that document delivered a translation of it into English, certified in the prescribed manner to be a correct translation.
(5) The above requirements are subject to the following qualifications—
(a) an undertaking is not required to prepare for the purposes of this section accounts which would not otherwise be prepared, and if no accounts satisfying the above requirements are prepared none need be appended;
(b) a document need not be appended if it would not otherwise be required to be published, or made available for public inspection, anywhere in the world, but in that case the reason for not appending it shall be stated in a note to the company’s accounts;
(c) where an undertaking and all its subsidiary undertakings are excluded from consolidation in accordance with section 229(4), the accounts of such of the subsidiary undertakings of that undertaking as are included in its consolidated group accounts need not be appended.
(6) Subsections (2) to (4) of section 242 (penalties, &c. in case of default) apply in relation to the requirements of this section as they apply in relation to the requirements of subsection (1) of that section.
(1) The period allowed for laying and delivering accounts and reports is—
(a) for a private company, 10 months after the end of the relevant accounting reference period, and
(b) for a public company, 7 months after the end of that period.
This is subject to the following provisions of this section.
(2) If the relevant accounting reference period is the company’s first and is a period of more than 12 months, the period allowed is—
(a) 10 months or 7 months, as the case may be, from the first anniversary of the incorporation of the company, or
(b) 3 months from the end of the accounting reference period,
whichever last expires.
(3) Where a company carries on business, or has interests, outside the United Kingdom, the Channel Islands and the Isle of Man, the directors may, in respect of any financial year, give to the registrar before the end of the period allowed by subsection (1) or (2) a notice in the prescribed form—
(a) stating that the company so carries on business or has such interests, and
(b) claiming a 3 month extension of the period allowed for laying and delivering accounts and reports;
and upon such a notice being given the period is extended accordingly.
(4) If the relevant accounting period is treated as shortened by virtue of a notice given by the company under section 225 (alteration of accounting reference date), the period allowed for laying and delivering accounts is that applicable in accordance with the above provisions or 3 months from the date of the notice under that section, whichever last expires.
(5) If for any special reason the Secretary of State thinks fit he may, on an application made before the expiry of the period otherwise allowed, by notice in writing to a company extend that period by such further period as may be specified in the notice.
(6) In this section “the relevant accounting reference period” means the accounting reference period by reference to which the financial year for the accounts in question was determined.”.
The following sections are inserted in Part VII of the [1985 c. 6.] Companies Act 1985—
(1) If it appears to the directors of a company that any annual accounts of the company, or any directors' report, did not comply with the requirements of this Act, they may prepare revised accounts or a revised report.
(2) Where copies of the previous accounts or report have been laid before the company in general meeting or delivered to the registrar, the revisions shall be confined to—
(a) the correction of those respects in which the previous accounts or report did not comply with the requirements of this Act, and
(b) the making of any necessary consequential alterations.
(3) The Secretary of State may make provision by regulations as to the application of the provisions of this Act in relation to revised annual accounts or a revised directors' report.
(4) The regulations may, in particular—
(a) make different provision according to whether the previous accounts or report are replaced or are supplemented by a document indicating the corrections to be made;
(b) make provision with respect to the functions of the company’s auditors in relation to the revised accounts or report;
(c) require the directors to take such steps as may be specified in the regulations where the previous accounts or report have been—
(i) sent out to members and others under section 238(1),
(ii) laid before the company in general meeting, or
(iii) delivered to the registrar,
or where a summary financial statement based on the previous accounts or report has been sent to members under section 251;
(d) apply the provisions of this Act (including those creating criminal offences) subject to such additions, exceptions and modifications as are specified in the regulations.
(5) Regulations under this section shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.
(1) Where copies of a company’s annual accounts have been sent out under section 238, or a copy of a company’s annual accounts has been laid before the company in general meeting or delivered to the registrar, and it appears to the Secretary of State that there is, or may be, a question whether the accounts comply with the requirements of this Act, he may give notice to the directors of the company indicating the respects in which it appears to him that such a question arises, or may arise.
(2) The notice shall specify a period of not less than one month for the directors to give him an explanation of the accounts or prepare revised accounts.
(3) If at the end of the specified period, or such longer period as he may allow, it appears to the Secretary of State that no satisfactory explanation of the accounts has been given and that the accounts have not been revised so as to comply with the requirements of this Act, he may if he thinks fit apply to the court.
(4) The provisions of this section apply equally to revised annual accounts, in which case the references to revised accounts shall be read as references to further revised accounts.
(1) An application may be made to the court—
(a) by the Secretary of State, after having complied with section 245A, or
(b) by a person authorised by the Secretary of State for the purposes of this section,
for a declaration or declarator that the annual accounts of a company do not comply with the requirements of this Act and for an order requiring the directors of the company to prepare revised accounts.
(2) Notice of the application, together with a general statement of the matters at issue in the proceedings, shall be given by the applicant to the registrar for registration.
(3) If the court orders the preparation of revised accounts, it may give directions with respect to—
(a) the auditing of the accounts,
(b) the revision of any directors' report or summary financial statement, and
(c) the taking of steps by the directors to bring the making of the order to the notice of persons likely to rely on the previous accounts,
and such other matters as the court thinks fit.
(4) If the court finds that the accounts did not comply with the requirements of this Act it may order that all or part of—
(a) the costs (or in Scotland expenses) of and incidental to the application, and
(b) any reasonable expenses incurred by the company in connection with or in consequence of the preparation of revised accounts,
shall be borne by such of the directors as were party to the approval of the defective accounts.
For this purpose every director of the company at the time the accounts were approved shall be taken to have been a party to their approval unless he shows that he took all reasonable steps to prevent their being approved.
(5) Where the court makes an order under subsection (4) it shall have regard to whether the directors party to the approval of the defective accounts knew or ought to have known that the accounts did not comply with the requirements of this Act, and it may exclude one or more directors from the order or order the payment of different amounts by different directors.
(6) On the conclusion of proceedings on an application under this section, the applicant shall give to the registrar for registration an office copy of the court order or, as the case may be, notice that the application has failed or been withdrawn.
(7) The provisions of this section apply equally to revised annual accounts, in which case the references to revised accounts shall be read as references to further revised accounts.
(1) The Secretary of State may authorise for the purposes of section 245B any person appearing to him—
(a) to have an interest in, and to have satisfactory procedures directed to securing, compliance by companies with the accounting requirements of this Act,
(b) to have satisfactory procedures for receiving and investigating complaints about the annual accounts of companies, and
(c) otherwise to be a fit and proper person to be authorised.
(2) A person may be authorised generally or in respect of particular classes of case, and different persons may be authorised in respect of different classes of case.
(3) The Secretary of State may refuse to authorise a person if he considers that his authorisation is unnecessary having regard to the fact that there are one or more other persons who have been or are likely to be authorised.
(4) Authorisation shall be by order made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.
(5) Where authorisation is revoked, the revoking order may make such provision as the Secretary of State thinks fit with respect to pending proceedings.
(6) Neither a person authorised under this section, nor any officer, servant or member of the governing body of such a person, shall be liable in damages for anything done or purporting to be done for the purposes of or in connection with—
(a) the taking of steps to discover whether there are grounds for an application to the court,
(b) the determination whether or not to make such an application, or
(c) the publication of its reasons for any such decision,
unless the act or omission is shown to have been in bad faith.”.
(1) The following sections are inserted in Part VII of the [1985 c. 6.] Companies Act 1985, as the beginning of a Chapter II—
(1) A company which qualifies as a small or medium-sized company in relation to a financial year—
(a) is exempt from the requirements of paragraph 36A of Schedule 4 (disclosure with respect to compliance with accounting standards), and
(b) is entitled to the exemptions provided by Schedule 8 with respect to the delivery to the registrar under section 242 of individual accounts and other documents for that financial year.
(2) In that Schedule—
Part I relates to small companies,
Part II relates to medium-sized companies, and
Part III contains supplementary provisions.
(3) A company is not entitled to the exemptions mentioned in subsection (1) if it is, or was at any time within the financial year to which the accounts relate—
(a) a public company,
(b) a banking or insurance company, or
(c) an authorised person under the Financial Services Act 1986,
or if it is or was at any time during that year a member of an ineligible group.
(4) A group is ineligible if any of its members is—
(a) a public company or a body corporate which (not being a company) has power under its constitution to offer its shares or debentures to the public and may lawfully exercise that power,
(b) an authorised institution under the Banking Act 1987,
(c) an insurance company to which Part II of the Insurance Companies Act 1982 applies, or
(d) an authorised person under the Financial Services Act 1986.
(5) A parent company shall not be treated as qualifying as a small company in relation to a financial year unless the group headed by it qualifies as a small group, and shall not be treated as qualifying as a medium-sized company in relation to a financial year unless that group qualifies as a medium-sized group (see section 249).
Companies Act 1989