BBP - UK LTD Accounts

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Accounts

Accounts	Accounts deserve a special mention because it is the personal responsibility of each director to ensure that they are prepared, circulated to the members and delivered to Companies House within the time allowed. Every limited company must submit accounts to Companies House even if it has not traded .
The financial year	This is the period covered by the accounts. For a new company, it starts on the date of incorporation, regardless of when the company actually starts doing business. For a company which has previously delivered accounts, it starts from the day after the period covered by the earlier accounts. The financial year ends on the company's accounting reference date, or, if the company wishes, on a date up to seven days either side of the accounting reference date. A particular financial year can be less or more than 12 months, but it cannot be more than 18 months.
Accounting reference date(ARD)	Every company has an accounting reference date, but can change it using Form 225. This date will be the last day of the month in which the first anniversary of its incorporation occurs.
Contents of the accounts	The accounts and reports prepared for the members of the company must include: - a directors' report; - a profit and loss account ; - a balance sheet. A company which qualifies as medium sized may include less detail in the profit and loss account sent to Companies House. Similary, a small company's accounts may comprise simply an abbreviated balance sheet.
Groups	Where a company is part of a group, the parent company must provide consolidated accounts for the group as well as individual accounts for the company.
Audit	Unless the company is able to claim exemption from audit, its accounts must be audited and the auditor's report included with the accounts provided for the members and for Companies House. The directors may appoint the first auditors to hold office until the first general meeting. The auditors are normally appointed at a general meeting at which accounts are considered. The auditor must be a member of a recognised supervisory body and eligible under the rules of that body to act as a company auditor.
Audit exemption	Companies with a turnover of no more than £ 5,6 million and a balance sheet total of no more than £ 2,8 million may dispense with an audit altogether. A company which is a member of a group may also claim exemption if the group turnover and balance sheet total do not exceed £ 5,6 million net (£ 6,72 million gross) and £ 2,8 million net (£ 3,36 million gross) respectively. Exemption from audit cannot be claimed by: - a public company unless the company is dormant; - a person who carries on insurance market activity; - a special register company under the Trade Union and Labour Relations (Consolidation) Act 1992 or an employers association; - companies where an audit is required by members holding at least 10% of issued share capital.
Approval of accounts and directors' report	The accounts must be approved by the board of directors, one of whom must sign the balance sheet. The directors' report must also be approved by the board and signed by the director or the secretary.
Circulation of accounts and reports	The accounts must normally be considered by a general meeting of the company, usually the anuual general meeting. A copy of the accounts and reports must be sent to every member or debenture holder, or anyone else entitled to attend, at least 21 days before the meeting takes place. In the case of a private company, the meeting to consider the accounts will normally be not later than 10 months after the accounting reference date. A company may be able to claim extra time if it has overseas interests or if the Secretary of State has agreed that there are special reasons for doing so. In either case, the extension must be arranged before the end of the period originally allowed for delivery of the accounts.
Delivery of accounts to Companies House	The time allowed for delivering accounts to Companies House is not later than 10 months after the accounting reference date. Late delivered civil penalty is automatic in the range of £100 to £1 000 for a private company and £500 to £5 000 for a public company. The directors are personally responsible for the delivery of accounts to Companies House. They are liable to prosecution in the Magistrates' Court if the accounts are delivered late or not at all. A conviction would mean a criminal record and usually a fine of up to £5 000. Persistent failure to deliver accounts or other documents on time could mean a daily default fine of up to £500. It could also result in the disqualification of those concerned as company directors.
Annual returns	Companies House will send a ‘shuttle' annual return form to the company's registered office each year containing details of the information held on the Companies House database. The first annual return must be made up to a date not more than 12 months after incorporation. Further returns should be at intervals of not more than 12 months.