Company Accounts

Preparing and filing company accounts
This information explains the main rules on how to file company accounts. It applies equally to all company accounts, irrespective of whether any filing exemptions apply to the content of the company accounts.

1. Do accounting records need to be kept by all uk companies ?
Yes. All limited companies, sole traders and partnerships, whether they are trading or not, must keep accounting records.

2. Do all uk limited companies have to deliver their company accounts to Companies House?
Yes, all uk limited and public limited companies must deliver their company accounts to Companies House. If they are eligible and wish to, medium-sized, small and dormant companies, may prepare and file 'abbreviated company accounts'.

Non limited businesses need only deliver company accounts to Companies House if, during the period covered by the company accounts, the business was:

(a) a parent or subsidiary of a limited undertaking; or
(b) an insurance company or bank (or the parent of an insurance company or bank); or
(c) a 'qualifying company' within the meaning of the Partnerships and Unlimited Companies (company accounts) Regulations 1993
(d) operating under a trading stamp scheme

3. What must be included within a set of company accounts?
Typically, they must include:

(a) a profit and loss account (or income and expenditure account if the company is non-profit);
(b) a balance sheet signed by a director;
(c) an auditors' report signed by the auditor (if relevant);
(d) a directors' report signed by a director or the company secretary;
(e) notes to the company accounts; and
(f) group company accounts (if relevant).

This explanation does not go into the detailed information that these documents must contain. Certain information may be omitted from the company accounts of medium-sized and small (including dormant) companies prepared under the special provisions of part VII of the Act. These companies may abbreviate further the company accounts they file at Companies House. Very small companies and dormant companies may also be fully exempt from any audit.

4. What period must the accounts cover?
A company's first accounts must cover the period starting on the date of incorporation and not the first day of trading. The must end on the accounting reference date (ARD) or up to seven days either side of this date. Subsequent company accounts must then start on the day after the previous company accounts ended. They must finish on the accounting reference date or up to seven days either side of it.

5. How long have I got to file my first company 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 Companies House within 21 months of the date of incorporation for private companies and 18 months for public companies or 3 months from the accounting reference date, whichever is longer. The definition of a period of months in relation to filing the company accounts also applies to the first company accounts.

For example, a private company incorporated on 1 January with an Accounting Reference Date of 31 January has until midnight on 1 October (21 months from the date of incorporation) to deliver its company accounts, not 30 October.

6. How long have I got to file subsequent company accounts?
Unless you are filing you company's first set of company accounts, the time normally allowed for delivering company accounts to Companies House is:

(a) for a private limited company, 9 months from the accounting reference date;
(b) for a public company, 6 months from the accounting reference date.

However, if the accounting reference period has been shortened for whatever reason, the time allowed for filing the accounts is the longer of:

(a)  for a private limited company, 9 months (or for a public company 6 months) from the accounting reference date; or    
(b) 3 months from the date of the notice (Form 225).

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 June of the following year to deliver its company accounts. If there is no corresponding date, the last day of the month will therefore apply. For example, a private company with an accounting reference date of 31 May has until midnight on 28 February the following year to deliver its company accounts.

7. Can the time allowed for submitting company accounts be extended?
If a company carries on business or has an overseas interest, 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 its filing extension. It does not automatically apply from one year to the next.

An application can also be made to the Secretary of State for Trade and Industry to extend the time for laying and delivering company accounts if there is a very special reason for doing so. For example, if there has been an unforeseen event or circumstance which was outside the control of the company and its auditors. This 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 required.

8. What happens if the company accounts are delivered late?
There is an automatic civil penalty for late filing. The amount depends on how late the company accounts are and whether the company is private or public. The latest fixed penalties are as follows:

Length of delay - private/(public)
(a) 1 month - £150 (£750)
(b) 3 months - £ 375 (£1,500)
(c) 6 months - £750 (£3,000)
(d) 6 months plus - £1,500 (£7,500)

Please note that failing to deliver company 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 a Bank Holiday, the law still requires company accounts to be filed by that date. You should therefore ensure that they are posted in time to arrive before such a deadline.

9. Who must approve and sign the company accounts?
The company 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 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 company accounts, then it must state the names of the auditors or accountants and be signed by them. You do not have to publish the company 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 when they arrive at Companies House?
The documents and forms you deliver to Companies House are initially scanned to produce an electronic image. The original documents are stored and the electronic image is then used as the official working document. When anyone views the offical company record, they will see the electronic image reproduced on-line or on microfilm. It is therefore important not only that the original is legible, but that it can also produce a clear further copy.

11. What happens if my documents does not meet the guidelines? Section 706 of the Act allows Companies House to simply reject documents that cannot be captured electronically, giving a notice explaining why they are unacceptable. An acceptable copy must then be delivered within fourteen days of the notice (otherwise the original is treated as not having been delivered).

12. How should the documents be set out?
Every document delivered must state clearly the company registered number and must comply with any requirements specified relating to the legibility of that document. In summary, documents should be on A4 size, white, plain paper between a weight of 80gsm and 100gsm with a matt finish. Text should be black, legible, clear and of a uniform density.

When you prepare a document:
(a) use black type or ink;
(b) use bold lettering if possible;
(c) don't use a carbon copy;
(d) don't use a dot matrix printer;

Please note that photocopies can result in a grey shade that will not always scan well; use A4 sized paper with an appropriate margin; and include the company number in the top right-hand corner of the first page.

Glossy company accounts - If you are producing glossy colour-printed company accounts, a typed, unbound black and white version of a printer's proof is ideal, provided it has all the necessary signatures.