Company accounts

Question 1

what are all companies obligations in relation to accounts?

Answer 1

All companies must keep adequate accounting records

Ds (unless the company is exempt*) must deliver accounts and reports to CH for each financial year.

*there are less onerous requirements for dormant, small & medium sized companies i.e. some can produce simpler annual accounts, or need not produce a strategic report

Question 2

unless exempt, what accounts and reports must be filed with CH?

Answer 2

o Annual accounts (inc. balance sheet, profit & loss account + explanatory notes)
o Strategic report
o Directors’ report
o Auditors’ report

Question 3

what are the Ds obligations regarding the annual accounts filed with CH?

Answer 3

The BOD must sign the accounts + confirm they give a true and fair view of the financial position of the company

Ds can be criminally liable if the accounts are not reasonably accurate

Question 4

what is the accounting reference period and accounting reference day?

Answer 4

ARP = the financial year the company uses for its accounts
ARD = final day of the financial year

Question 5

how is the first ARP determined?

Answer 5

The first ARP is from the date of incorporation to the last day of the month the following year (this day then becomes the ARD)

Question 6

how does a company change its ARP? What are the restrictions?

Answer 6

A company can change its ARP by changing the ARD + giving notice to CH

It cannot make an ARP longer than 18 months

The ARP can only be extended once every 5 years, there is no limit as to how many times the ARP can be shortened

Question 7

what are the time periods for PLCs and LTDs to file their first accounts?

Answer 7

LTDs = the later of:
o 9 months after the first incorporation anniversary (i.e. 21 months from incorporation); or
o 3 months after the ARD

PLCs = the later of:
o 6 months after the first incorporation anniversary (i.e. 18 months from incorporation); or
o 3 months after the ARD

NB: ‘the 3 months from the ARD’ is only relevant if the company has changed its ARD thereby extending the ARP to longer than 12 months

Question 8

after the first accounts, what are the standard time periods for PLCs and LTDs to file their accounts?

Answer 8

LTDs  must be filed within 9 months after the end of the ARP

PLCs  must be filed within 6 months after the end of the ARP
o i.e. ARP ends 5 June = accounts to be filed by 5 December