Contents
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Introduction
This booklet is a
guide to the rules
governing public disclosure
of accounts by all
limited companies.
The booklet covers
three main topics:
-
Accounting
reference dates
(ARD).
The ARD is the
financial year-end.
It is also the
date that determines
when accounts
are due for
delivery to
Companies House.
Every company
has an ARD.
Companies House
must be told
in advance when
the date is
about to be
changed. It
can be costly
if you forget
to tell us and
prepare accounts
to the wrong
date. If you
do, we will
refuse registration
of the accounts
and you will
have to prepare
fresh accounts
to the ARD held
on record at
Companies House.
-
Preparing
and filing accounts.
There are deadlines
by which accounts
must be prepared
and delivered
to Companies
House. If you
miss the deadline
an automatic
penalty will
be levied, without
exception. So
it is important
that you, your
accountants
and your auditors
are aware of
the filing deadline.
-
Content
of accounts.
This booklet
cannot tell
you how to prepare
company accounts
- your accountant
has specialist
knowledge of
this. But it
will tell you
what documents
make up a set
of accounts,
what exemptions
you may be able
to take advantage
of, and whether
you will need
to appoint an
auditor.
You
will find the relevant
law in the Companies
Act 1985 (as amended
in 1989 and later).
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CHAPTER 1
Accounting reference
dates
1. What
is a financial year?
Every company must
prepare annual accounts
that report on the
performance and
activities of the
company during the
year. The period
reported on in the
accounts is called
the financial year.
This starts on the
day after the previous
financial year ended
or, in the case
of a new company,
on the day of incorporation.
A more precise term
for a financial
year is an accounting
reference period
The accounting reference
period ends on the
accounting reference
date (ARD) - see
questions 2 and
3 - or a date up
to seven days either
side of the ARD,
if this is more
convenient.
2. How is
the ARD fixed?
For a new company,
the ARD is set using
its date of incorporation
- see question 3.
You can change the
first accounting
reference period
and subsequent accounting
reference periods
by changing the
ARD - see questions
4 and 5.
3. What
period must a company's
first accounts cover?
For all new companies,
the first accounting
reference period
is automatically
set as the first
anniversary of the
last day in the
month in which the
company was incorporated.
For example, if
the company was
incorporated on
10 June 1999 its
ARD would be set
at 30 June, and
the first accounts
would cover a period
from 10 June 1999
to 30 June 2000
- or up to seven
days either side
of that date. Although
the ARD is set on
incorporation, you
can change it -
see question 4.
4. Can the
ARD be changed?
Yes, by completing
Form 225 and sending
it to Companies
House. But the change
can only be made
to the current or
the immediately
previous accounting
reference period
and you have to
register the new
ARD before the filing
deadline of the
accounts. In other
words, if Companies
House is expecting
accounts for a particular
accounting reference
period and they
become overdue,
it is too late to
say that you wanted
to change the ARD.
Private companies
normally have 10
months and public
companies 7 months
to send their accounts
to Companies House.
The period allowed
for sending a company's
first accounts is
calculated differently
and this is explained
in chapter
2.
5. Are there
any restrictions
on changing the
ARD?
You may change an
ARD by shortening
an accounting reference
period as often
as you like and
by as many months
as you like. However,
there are restrictions
on extending accounting
reference periods:
-
You
may not extend
a period so
that it lasts
more than 18
months from
the start date
of the accounting
period.
-
You
may not extend
more than once
in 5 years unless:
(a) the company
is subject to
an administration
order; or
(b) the Secretary
of State has
directed this;
or
(c) the company
is aligning
its accounting
reference date
with that of
a subsidiary
or parent undertaking
established
within the European
Economic Area.
Countries comprising
the European
Economic Area
are as follows:
Iceland, Norway,
Finland, Sweden,
Ireland, United
Kingdom, Denmark,
Germany, Netherlands,
Belgium, Luxembourg,
Austria, Portugal,
Spain, France,
Italy, Greece,
Liechtenstein,
Czech Republic,
Estonia, Cyprus,
Latvia, Lithuania,
Hungary, Malta,
Poland, Slovenia,
Slovakia.
6. What about
companies incorporated
overseas?
A company incorporated
overseas which has
registered:
is
subject to the same
ARD rules except
that it is not restricted
as to how often
it may extend accounting
periods. The same
Form 225 is used
to change the ARD.
A company incorporated
overseas which has
registered a branch
in Great Britain,
and which has to
publish accounts
in its country of
incorporation is
subject to different
rules - see our
booklet, 'Oversea
Companies'.
Back
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CHAPTER 2
Preparing and filing
accounts
This chapter explains
the basic rules
on filing accounts.
It applies to all
company accounts
irrespective of
whether any filing
exemptions apply
to the content of
the accounts.
1. Do all
companies have to
keep accounting
records?
Yes. All limited
and unlimited companies,
whether or not they
are trading, must
keep accounting
records.
2. What
does a set of accounts
include?
Generally, accounts
must include:
- a profit
and loss account
(or income and
expenditure account
if the company
is not trading
for profit);
- a balance
sheet
signed by a director;
- an auditors'
report
signed by the
auditor (if appropriate);
- a directors'
report
signed by a director
or the secretary
of the company;
- notes to the
accounts; and
- group accounts
(if appropriate).
This
booklet cannot go
into the detailed
information that
these documents
must contain - for
this see the Companies
Act. Certain information
may be omitted from
the accounts of
medium-sized and
small (including
very small and dormant)
companies prepared
under the special
provisions of part
VII of the Act.
These companies
may further abbreviate
the accounts they
file at Companies
House - see chapter
3. Very small
companies and dormant
companies may also
be exempt from audit
- see chapters 4
and 5.
3. Do all
companies have to
deliver their accounts
to the Registrar?
All limited
and public limited
companies must
send their accounts
to the Registrar.
If they are eligible
and wish to, medium-sized,
small, very small
and dormant companies
may prepare and
file 'abbreviated
accounts' - see
chapter
3, 4
and 5.
Unlimited companies
need only deliver
accounts to the
Registrar if, during
the period covered
by the accounts,
the company was:
4.
What period must
the accounts cover?
A company's first
accounts cover the
period starting
on the date of incorporation,
not the first day
of trading. They
end on the accounting
reference date (ARD)
or up to 7 days
either side of that
date. ARDs and how
to change them are
covered in chapter
1.
Subsequent accounts
start on the day
after the previous
accounts ended.
They finish on the
ARD or up to 7 days
either side of it.
5. How long
do I have to file
my company's first
accounts?
If you are filing
your company's first
accounts and they
cover a period of
more than 12 months,
they must be delivered
to the Registrar
within 22
months of the date
of incorporation
for private
companies and 19
months
for public
companies or 3 months
from the ARD, whichever
is longer. The definition
of a period of months
in connection with
filing the accounts
also applies to
the first accounts.
For example, a private
company incorporated
on 1 January with
an Accounting Reference
Date (ARD) of 31
January has until
midnight on 1 November
(22 months from
the date of incorporation)
to deliver its accounts,
not 30 November.
6. How long
do I normally have
to file my accounts?
Unless you are filing
you company's first
accounts (see question
5) the time normally
allowed for delivering
accounts to Companies
House is:
- for a private
company,
10 months from
the ARD;
- for a public
company,
7 months from
the ARD.
However, if the accounting
reference period has
been shortened, the
time allowed for filing
the accounts is the
longer of:
- for a private
company 10 months
(or for a public
company 7 months)
from the ARD;
or
- 3 months from
the date of the
notice (Form 225).
Please
be aware
of the definition
of a period
of months
in connection
with filing
accounts.
A period
of months
after a
given date
ends on
the corresponding
date in
the appropriate
month. For
example
a private
company
with an
ARD of 30
September
has until
midnight
on 30 July
of the following
year to
deliver
its accounts,
not 31
July.
If there
is no corresponding
date, the
last day
of the month
will apply.
For example,
a private
company
with an
ARD of 30
April has
until midnight
on 28 February
the following
year to
deliver
its accounts.
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7. Can the
time allowed for
delivering accounts
be extended?
If a company carries
on business or has
interests overseas,
a 3-month extension
to the normal filing
period can be claimed
by delivering Form
244 to Companies
House. This form
must be delivered
before the normal
filing deadline
and this must be
done for every year
that the company
wishes to claim
the extension. It
does not automatically
apply from one year
to the next.
An application may
also be made to
the Secretary of
State for Trade
and Industry to
extend the time
for laying and delivering
accounts if there
is a special reason
for doing so. For
example, if there
has been an unforeseen
event which was
outside the control
of the company and
its auditors. The
application must
be made in writing,
be delivered before
the normal filing
deadline, and must
contain a full explanation
of the reasons for
the extension and
the length of the
extension needed.
For
companies incorporated
in
England & Wales
write to: |
For
companies incorporated
in
Scotland write
to: |
The
Secretary of
State for
Trade &
Industry
c/o Companies
Admin Section
Companies House
Crown Way
Cardiff CF14
3UZ
DX33050 Cardiff |
The
Secretary of
State for
Trade &
Industry
Companies House
37 Castle Terrace
Edinburgh EH1
2EB
DX ED235 Edinburgh
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8. What
if the accounts
are delivered late?
There is an automatic
civil penalty for
late filing. The
amount depends on
how late the accounts
arrive and whether
the company is private
or public. The fixed
penalties are as
follows:
| Length
of delay |
Public
company |
Private
company |
| 3
months or less |
£
500 |
£100 |
| 3
months one day
to 6 months |
£1000 |
£250 |
| 6
months one day
to 12 months |
£2000 |
£500 |
| More
than 12 months |
£5000 |
£1000 |
Failing to deliver
accounts on time
is also a criminal
offence for which
company directors
may be prosecuted.
Late filing penalties
are fully explained
in our booklet,
'Late Filing Penalties'.
Please
note: if
a filing
deadline
expires
on a Sunday
or Bank
Holiday
the law
still requires
accounts
to be filed
by that
date. So
you should
ensure that
they are
posted in
time to
arrive before
such a deadline.
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9. Who can
approve and sign
accounts?
The accounts must
be approved by the
company's board
of directors and
signed before they
are sent to Companies
House.
-
The
balance sheet
must be signed
by a director,
with any statements
about accounting
or filing exemptions
appearing above
the director's
signature.
- The directors'
report, if one
is required, must
be signed by a
director or the
company secretary.
-
If
an auditors'
report, special
auditors' report
or accountants'
report is attached
to the accounts,
then it must
state the names
of the auditors
or accountants
and be signed
by them.
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You do not
have to lay
the accounts
before a general
meeting of the
company, or
have them agreed
by the Inland
Revenue, before
sending them
to Companies
House.
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10. Does
Companies House
give technical advice
on accounts?
No. We can give
general guidance,
but not technical
advice on specific
accounting issues.
Firstly, giving
technical advice
is not a role that
the Government has
given us. Secondly,
it is not practicable:
your accounts are
subject to complex
legal requirements,
and we do not know
enough about your
company to be confident
that we are giving
you proper advice.
Consult an accountant
if you need this
sort of advice.
11. What
happens to documents
sent to Companies
House?
The documents and
forms you deliver
to Companies House
are scanned to produce
an electronic image.
The original documents
are then stored,
and the electronic
image is used as
the working document.
When your business
contacts view the
company record,
they see the electronic
image reproduced
on-line or on microfilm.
So it is important
not only that the
original is legible,
but that it can
also produce a clear
copy.
The remainder of
this chapter lays
down a few quality
guidelines to follow
when preparing accounts
and other documents
for filing at Companies
House.
12. What
happens if my documents
do not meet the
guidelines?
Section 706 of the
Act allows Companies
House to reject
documents that cannot
be captured electronically,
giving a notice
saying why they
are unacceptable.
An acceptable copy
must be delivered
within 14 days of
the notice (otherwise
we treat the original
as not having been
delivered).
13. How
should documents
be set out?
Every document delivered
to the Registrar
must state prominently
the registered number
of the company,
and must comply
with any requirements
specified by the
Registrar relating
to the legibility
of that document.
Briefly, documents
should be on A4
size, plain white
paper between 80gsm
and 100gsm in weight
with a matt finish.
Text should be black,
clear, legible,
and of uniform density.
When you
prepare a document:
- use black ink
or black type;
- use bold lettering
(some elegant
thin typefaces
and pens give
poor quality copies);
- don't send a
carbon copy;
- don't use a
dot matrix printer;
- remember - photocopies
can result in
a grey shade that
will not scan
well;
- use A4 size
paper with a good
margin; and
- include the
company number
in the top right-hand
corner of the
first page.
Glossy
accounts
If you are producing
colour-printed glossy
accounts, please
save them for your
shareholders and
others who will
appreciate them.
We still need black
on white with a
matt finish. A typed,
unbound version
of a printer's proof
is ideal, provided
it has the necessary
signatures.
14.
Can I find out more
about this?
For further guidance
on print requirements
contact 029 2038
0575.
Back to top
CHAPTER 3
Small and medium-sized
company exemptions
1. What
exemptions are available?
Certain small or
medium-sized companies
may prepare accounts
for their members
under the special
provisions of sections
246 and 246A of
the Companies Act
1985. In addition,
they may prepare
and deliver abbreviated
accounts to the
Registrar.
This chapter explains
the exemptions available
to small and medium-sized
companies. Certain
small companies
with a turnover
of less than £1
million (£250,000
for companies that
are charities) and
assets of less than
£1.4 million can
claim exemption
from audit. This
is dealt with in
chapter
4.
The period accounts
have to cover and
the time allowed
for sending them
to Companies House
is covered in chapter
2.
2. What
is a small or medium-sized
company?
Public companies
and certain companies
in the regulated
sectors cannot qualify
as small or medium-sized
companies. For other
companies, the size
of the company (and
in the case of a
parent company the
size of the group
headed by it) in
terms of its turnover,
balance sheet total
(meaning the total
of the fixed and
current assets)
and average number
of employees determines
whether it is classed
as small or medium-sized.
The exact conditions
for qualifying as
a small or medium-sized
company are given
below.
To be a small company,
at least two of
the following conditions
must be met:
- annual turnover
must be £2,800,000
or less;
- the balance
sheet total must
be £1,400,000
or less;
- the average
number of employees
must be 50 or
fewer.
Please
note:
New accounting
exemption thresholds
apply to financial
years ending
on or after
30 January 2004.
To be a small
company, at
least 2 of the
following conditions
must be met:
- annual
turnover
must be
£5.6
million
or less;
- the balance
sheet total
must be
£2.8
million
or less;
- the average
number of
employees
must be
50 or fewer.
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