Annual Accounts
Preparing and filing annual accounts
This page explains the basic rules on filing annual accounts. It applies to all company
annual accounts irrespective of whether any filing exemptions apply to the content of
the annual 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 including annual accounts.
2. What does a set of annual accounts include?
Generally, annual accounts must include:
(a) a profit and loss account (or income and expenditure account if the company
is not trading for profit);
(b) a balance sheet signed by a director;
(c) an auditors' report signed by the auditor (if appropriate);
(d) a directors' report signed by a director or the secretary of the company;
notes to the annual accounts; and
(e) group annual accounts (if appropriate).
This guidance note cannot go into the detailed information that these documents
must contain - for this see the Companies Act. Certain information may be omitted
from the annual 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 annual accounts they file at Companies House
3. Very small companies and dormant companies may also be exempt from audit.
3. Do all companies have to deliver their annual accounts to Companies House?
All limited and public limited companies must send their
annual accounts to Companies House. If they are eligible and wish to,
medium-sized, small, very small and dormant companies may prepare
and file 'abbreviated annual accounts'.
Unlimited companies need only deliver annual accounts to the Registrar if, during the period covered
by the annual accounts, the company was:
(a) a subsidiary or a parent of a limited undertaking; or
(b) a banking or insurance company (or the parent company of a banking or
insurance company); or
(c) a 'qualifying company' within the meaning of the Partnerships and Unlimited
Companies (annual accounts) Regulations 1993
(d) operating a trading stamp scheme.
4. What period must the annual accounts cover?
A company's first annual 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.
Subsequent annual accounts start on the day after the previous annual accounts ended.
They finish on the accounting reference date or up to 7 days either side of it.
5. How long do I normally have to file my annual accounts?
Unless you are filing you company's first annual accounts the
time normally allowed for delivering annual accounts to Companies House is:
(a) for a private company, 10 months from the accounting reference date;
(b) for a public company, 7 months from the accounting reference date.
However, if the accounting reference period has been shortened, the time allowed
for filing the annual accounts is the longer of:
(a) for a private company 10 months (or for a public company 7 months) from
the accounting reference date; 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 annual 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 accounting reference date of 30 September has until
midnight on 30 July of the following year to deliver its annual 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 accounting reference
date of 30 April has until midnight on 28 February the following
year to deliver its annual accounts.
6. How long do I have to file my company's first annual accounts?
If you are filing your company's first annual 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 accounting reference date, whichever is longer.
The definition of a period of months in connection with filing
the annual accounts also applies to the first annual accounts. For example,
a private company incorporated on 1 January with an Accounting
Reference Date of 31 January has until midnight on 1 November
(22 months from the date of incorporation) to deliver its annual accounts, not 30 November.
7. Can the time allowed for delivering annual 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
annual 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.
8. What if the annual accounts are delivered late?
There is an automatic civil penalty for late filing.
The amount depends on how late the annual accounts arrive and whether
the company is private or public. The fixed penalties are as
follows:
Length of delay Public company Private company
(a) 3 months or less £ 500 £100
(b) 3 months one day to 6 months £1000 £250
(c) 6 months one day to 12 months £2000 £500
(d) More than 12 months £5000 £1000
Failing to deliver annual accounts on time is also a criminal offence for
which company directors may be prosecuted.
Please note: if a filing deadline expires on a Sunday or Bank Holiday
the law still requires annual accounts to be filed by that date. So
you should ensure that they are posted in time to arrive before
such a deadline.
9. Who can approve and sign annual accounts?
The annual 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 annual accounts, then it must state the names
of the auditors or accountants and be signed by them. You do not have to lay
the annual accounts before a general meeting of the company, or have them agreed by
the Inland Revenue, before sending them to Companies House.
10. 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.
11. 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).
12. 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:
(a) use black ink or black type;
(b) use bold lettering (some elegant thin typefaces and pens give poor quality
copies);
(c) don't send a carbon copy;
(d) 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 annual accounts - If
you are producing colour-printed glossy annual accounts, please save them for your
shareholders and others who will appreciate them. Companies House requires
black on white with a matt finish. A typed, unbound version of a printer's
proof is ideal, provided it has the necessary signatures.
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