Abbreviated Accounts are surely prepared from a *subset* of the Full set of Accounts
People as intelligent as Tim, who manage to behave more stupidly than people who are genuinely stupid, deserve credit.
Abbreviated Accounts are surely prepared from a *subset* of the Full set of Accounts
People as intelligent as Tim, who manage to behave more stupidly than people who are genuinely stupid, deserve credit.
It requires full accounts to be prepared, but you may choose to *file* only abbreviated accounts.
"Peter Saxton" wrote
As before, for *whom* ? The Companies Acts appear to discuss just *two* types of distribution:- (1) "Laying of accounts" for shareholders; and (2) "Delivering accounts" to Companies House.
Shareholders can make an **elective resolution** to "dispense with the requirement of laying accounts". "Delivered a/c's" (ie to CoH) can be abbreviated.
So, who do the *full* a/c's need to be prepared for, according to the Companies Acts?
"Peter Saxton" wrote
Yes, I have.
"Peter Saxton" wrote
The "intermediary" stage of *full* a/c's does not need to be created, in order to produce abbreviated a/c's. It is possible to go straight from the underlying raw accounting records ("books") to the abbreviated a/c's...
"Jonathan Bryce" wrote
Companies Act 1985 Schedule 8 ("Modified accounts of companies qualifying as small or medium sized") shows how the (statutory) a/c's can be abbreviated.
Where does it say that "full statutory" a/c's *also* have to be prepared, when the company is small (/medium)?
The full accounts still have to be issued to shareholders.
They have to be prepared to comply with statute. The the full accounts or abbreviated accounts taken from the full accounts have to be submitted to Companies House.
It looks like you forgotten what it says about the abbreviated accounts being prepared from the full accounts.
The full accounts have to be approved by the board and issued to the shareholders.
What *can* be done is irrelevant.
s 226
"These accounts are prepared in accordance with the special provisions of Part VII of the Companies Act 1985 relating to small companies.
The directors state: (a) the Company was entitled to exemption under Section 249A(1) of the Companies Act. (b) No notice from members requiring an audit has been deposited under Section 249B(2) of the Companies Act 1985 (c) The directors acknowledge their responsibilities for:- i. ensuring the Company keeps accounting records which comply with Section 221 of the Act, and ii. preparing accounts which give a true and fair view of the state of affairs of the Company as at the end of the financial year, and of its profit or loss for the financial year, in accordance with the requirements of section 226, and which otherwise comply with the requirements of the Companies Act relating to accounts, so far as applicable to the company:"
Alas, CA1985 is not on
rgds, Alan
How about
It doesn't have all of the Act but some useful stuff.
"Peter Saxton" wrote
In my copy of CA1985, s226 just talks about the notice for changing the accounting reference date. However, I understand that subsequent amendments may have renumbered the sections...
Would you care to post the text of the section that you are referring to?
"Peter Saxton" wrote
No, they don't. It's just an *entitlement* (if the s/h's desire), not a *requirement* !
But it doesn't have *any* of:- "PART VII - ACCOUNTS AND AUDIT" !!
s 238 (1), (2) CA 1985 says they must be sent. What's your reference to say it's an entitlement?
I don't have a copy of the Act. I do have FL Memo's Company Law 2006 which refers to s 238:
4261A company's statutory annual accounts, together with the directors' report must be approved by the board. Those documents, together with the auditor's report (if applicable), must then be:
- published;
- laid before the shareholders; and
- filed at Companies House.
It should be noted that, for companies preparing Companies Act accounts, there is a difference between its statutory accounts and the accounts which it must prepare to comply with wider accounting standards. Its statutory accounts consist solely of the profit and loss account and balance sheet, together with notes to those financial statements. Wider accounting standards also require a company to prepare a cash flow statement and a statement of total recognised gains and losses.
Board approval and signature
4263A company's statutory annual accounts and its directors' report must be approved by the board and signed on its behalf by a director or the company secretary. The name of the signatory must be stated on every copy of the directors' report. The accounts must be signed at the bottom of the company's balance sheet and the name of the signatory must be stated on every copy of the balance sheet (s 233, 234A CA 1985). If the board approves accounts which do not comply with the legislative requirements, every director who is a party to their approval and knows that they do not comply, or is reckless as to whether they comply, is guilty of an offence (s 233(5) CA 1985; ¶9935). Further, if an unsigned copy of the balance sheet or directors' report is circulated, published or issued, the company and every officer in default is guilty of an offence (ss 233(6), 234A(4) CA 1985; ¶9935).Publication Mandatory publication
4265A copy of the following documents must be sent to every shareholder (and also to every debenture holder or any other person entitled to receive notice of general meetings) (s 238(1), (2) CA 1985):- the company's statutory annual accounts;
- the directors' report; and
- the auditors' report (if relevant).
- giving an express notification of their wish to the company; or
- failing to respond to an opportunity to elect to receive the full accounts.
An entitled person can choose to continue receiving the company's full accounts if he prefers, and he remains entitled to request a copy of the full accounts even if he has chosen to receive the summary. The summary must include a summary auditors' report but not a summary directors' report (although information on dividends paid and proposed must instead be included as a note to the summary profit and loss account).
4266The documents can be sent by any of the following methods (s
238(4A), (4B) CA 1985):a. personal delivery or post;
b. electronic communication (e.g. email), provided the recipient has given the company an appropriate address for that purpose; or
c. publishing them onto a website, provided the recipients have consented to this method of service. The recipients must be notified that the documents have been published, the address of the website, the place on that website where the documents may be accessed and how they may be accessed. For example, the recipients could all be emailed a web link with an access password.
4267The documents must be sent at least 21 days before the date of the general meeting at which the accounts are to be laid (see ¶4273+) (s 238(1) CA 1985). Since the documents are normally laid at the company's annual general meeting, it is usually convenient to send copies of the documents with the notice of that meeting. If the copies are sent late, the shareholders entitled to attend and vote at the general meeting can agree that the documents should be treated as if they had been sent on time (s 238(4) CA 1985). If a company fails to send the documents, the company and every officer in default is guilty of an offence (s 238(5) CA 1985; ¶9935).
Additional copies
4268In addition to the mandatory copies to which they are entitled (¶4265+), a company's shareholder or debenture holder is entitled to demand one further copy of the:- last annual accounts;
- last directors' report; and
- the auditor's report on those documents (if relevant).
The company must meet such a demand within 7 days. It cannot charge for the additional copies. The documents can be sent by personal delivery, post or electronic communication (e.g. email), provided the recipient has given the company an appropriate address for that purpose. If the company fails to send a copy on demand, the company and every officer in default is guilty of an offence (s 239(3) CA 1985; ¶9935).
Voluntary publication
4269A company can of course choose to publish its statutory and/or non-statutory accounts to any other persons. A company will be treated has having ?published? its accounts if it publishes, issues or circulates them, or otherwise makes them available for public inspection, in a way which invites the public to read it.4270If a company chooses to publish its statutory accounts, they must always be accompanied by either the auditors' report or the accountant's report that the company falls within the audit exemption (¶4290) (s 240(1) CA 1985).
A company which is required to prepare group accounts cannot publish its individual statutory accounts without also publishing its group statutory accounts (s 240(2) CA 1985).
4271If a company chooses to publish any non-statutory accounts (e.g. an interim report), they must not be published with the relevant auditors' report or accountants' report. Instead, they must be published with a statement indicating (s 240(3) CA 1985):- that they are not the company's statutory accounts;
- whether any statutory accounts for that financial year have been filed at Companies House; and
- whether the statutory accounts are accompanied by an auditors' report or accountants' report, and whether the relevant report is qualified or unqualified.
- the report is qualified or unqualified;
- the auditors drew attention to any matters short of qualifying the report;
- the auditors considered that the accounting records or returns were inadequate or did not agree with the accounts; or
- the report states that the auditors failed to obtain necessary information and explanations.
Laying before general meeting
4273A company's annual accounts, directors' report and auditors' report (if relevant) must be laid before a general meeting of the company's shareholders (s 241 CA 1985). ?Laying? simply means presenting those accounts to the shareholders; the accounts do not have to be approved by them. Since the laying of accounts is an annual event, it generally occurs at the company's annual general meeting. Failure to lay accounts and reports is a criminal offence rendering the directors in default liable to a fine (¶9935; s 241(2) CA 1985). A director can defend such a charge by proving that he took all reasonable steps to secure compliance with the requirements, although not on the basis that the documents were never prepared (s 241(3), (4) CA 1985).Under the Company Law Reform Bill, private companies will not have to lay accounts and reports before a general meeting but the requirement will be retained for public companies (s 415 Company Law Reform Bill).
4274Private companies can dispense with the requirement to lay accounts and reports before a general meeting by passing an elective resolution to that effect (see ¶3562+) (s 252(1) CA 1985).Even when an elective resolution has been passed, any shareholder or auditor may demand that a general meeting be held for the purpose of laying the accounts and reports before it. The demand must be made in writing and deposited at the company's registered office (or by electronic communication if the company accepts notices in that manner) within 28 days of the last date on which the accounts and reports are sent out to the shareholders, debenture holders and other persons entitled to receive notice of general meetings (¶4265+). The directors must convene a general meeting within 21 days of receiving a demand and cannot give more than 28 days notice. The last date for a meeting called by the directors is therefore 49 days after the demand. If the directors do not convene the meeting within 21 days, the person who made the demand can convene it himself and claim his reasonable expenses from the company. The company must recoup those expenses from the remuneration of the directors in default. A meeting convened by the person making the demand must be held within 3 months of the demand, in the same manner as the directors would have to convene the meeting (i.e. with notices etc) (s 253 CA 1985).
Time period
4275The time period for the laying of accounts is strict. For a private company, the documents must be laid within 10 months of the end of the relevant accounting reference period (¶4217+). For a public company, the time period is 7 months (s 244(1) CA 1985). If the documents relate to the company's first financial year and the accounting reference period is more than 12 months, the period for the laying of documents is the longer of (s 244(2) CA 1985):- 22 months (for a private company) or 19 months (for a public company) from the date of incorporation; or
- 3 months from the end of the accounting reference period.
If the accounting reference period is shortened (¶4220), the period for the laying of documents is the longer of:
- the last date for the laying of accounts calculated by reference to the new accounting reference date; or
- 3 months from the date that Form 225 (change of accounting reference date) was filed.
Note that there is a particular definition of a month in this context (Dodds v Walker [1981] 2 All ER 609; Registrar of Companies v Radio-Tech Engineering Ltd [2004] BCC 277). A period of months after a given date ends on the corresponding date in the appropriate months. For example, 10 months after 30 September 2005 is 30 July 2006, not 31 July. Similarly, 10 months after 28 February 2005 is 28 December 2006, not 31 December 2006. However, if there is no corresponding date, the last day of the month will apply. For example, 10 months after 30 April 2005 is 28 February 2006. There is no relaxation of the rule if the last date falls on a Sunday or bank holiday: the documents must be posted in time to arrive before the deadline.
Under the Company Law Reform Bill, the period for filing accounts will be reduced to 9 months from the end of the relevant accounting period for private companies, and 6 months for public companies. In addition, the ?corresponding date rule? laid down in Dodds v Walker [1981] 2 All ER 609 will be statutorily reversed. This means that, following enactment of the Bill, 6 months from 30th June will be 31st December (ss 420, 421 Company Law Reform Bill).
4276The time period can be extended only if there is a special reason for doing so (e.g. there has been an unforeseen event which was outside the control of the company and its directors). The application must be made before the expiry of the original allowed period. It must be in writing, addressed to the secretary of state and give a full explanation for why an extension is being sought. There is no obligation on the secretary of state to grant an extension (s 244(5) CA 1985)."
"Peter Saxton" wrote
I did a search on the word "statutory" throughout your post, and on the word "full", and it doesn't seem to mention anywhere that the "*full* statutory" a/c's have to be produced **as well as** the "abbreviated" ones, nor that the "abbreviated" version are not actually the "statutory" ones (for a relevant small/medium company).
Wherever your quote says "statutory", I read it to mean: "abbreviated a/c's if company is small/medium".
Can you either point out somewhere that says that abbreviated a/c's are *not* "statutory", or that *both* need to be prepared?
"Peter Saxton" wrote
I read the Act to say that the Company has a duty to send them by default, which will apply if the shareholder's don't say whether they want them.
Are you saying that if the shareholders **don't want** to be sent the full a/c's (eg because the only two shareholders are also the only two directors, and they already have all the underlying accounting records anyway), that it's 'tough' and the rainforest has to go anyway?!
What rainforest?
i did not say that both need to be prepared. It is obvious from what I posted that the full accounts have to be prepared and the abbreviated accounts may be filed at Companies House.
"Peter Saxton" wrote
No, that's not obvious at all -- it could just as easily be that for a small company, abbreviated accounts
*are* the statutory accounts, and wherever it says "statutory accounts" it means the abbreviated ones.Which bit(s) do you think contradict that interpretation?
"Peter Saxton" wrote
Hehe, yeh it's disappearing far too fast isn't it? -- probably because of all the accountants preparing "full statutory accounts" for small companies when they don't need to!
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