Company Law Reform Bill [HL]

House of Commons

Session 2005 - 06
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Other Bills before Parliament

Company Law Reform Bill [HL]

Company Law Reform Bill [HL]
Part 15 — Accounts and reports
Chapter 7 — Publication of accounts and reports
193

(d)
the auditor’s report on those accounts (including the report on the
directors’ remuneration report and on the directors’ report).
(2)
The entitlement under this section is to a single copy of those documents, but
that is in addition to any copy to which a person may be entitled under section
405.
5
(3)
If a demand made under this section is not complied with within seven days of
receipt by the company, an offence is committed by—
(a)
the company, and
(b)
every officer of the company who is in default.
(4)
A person guilty of an offence under this section is liable on summary
10
conviction to a fine not exceeding level 3 on the standard scale and, for
continued contravention, a daily default fine not exceeding one-tenth of level
3 on the standard scale.
Requirements in connection with publication of accounts and reports
417
Name of signatory to be stated in published copies of accounts and reports
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(1)
Every copy of a document to which this section applies that is published by or
on behalf of the company must state the name of the person who signed it on
behalf of the board.
(2)
In the case of an unquoted company, this section applies to copies of—
(a)
the company’s balance sheet, and
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(b)
the directors’ report.
(3)
In the case of a quoted company, this section applies to copies of—
(a)
the company’s balance sheet,
(b)
the directors’ remuneration report, and
(c)
the directors’ report.
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(4)
If a copy is published without the required statement of the signatory’s name,
an offence is committed by—
(a)
the company, and
(b)
every officer of the company who is in default.
(5)
A person guilty of an offence under this section is liable on summary
30
conviction to a fine not exceeding level 3 on the standard scale.
418
Requirements in connection with publication of statutory accounts
(1)
If a company publishes any of its statutory accounts, they must be
accompanied by—
(a)
the auditor’s report on those accounts (unless the company is exempt
35
from audit and the directors have taken advantage of that exemption),
or
(b)
where the company is exempt from audit by virtue of section 466
(charity: independent examiner’s report in lieu of audit) and the
directors take advantage of that exemption, the report made for the
40
purposes of that section.

Company Law Reform Bill [HL]
Part 15 — Accounts and reports
Chapter 7 — Publication of accounts and reports
194

(2)
A company that prepares statutory group accounts for a financial year must
not publish its statutory individual accounts for that year without also
publishing with them its statutory group accounts.
(3)
A company’s “statutory accounts” are its accounts for a financial year as
required to be delivered to the registrar under section 425.
5
(4)
If a company contravenes any provision of this section, an offence is committed
by—
(a)
the company, and
(b)
every officer of the company who is in default.
(5)
A person guilty of an offence under this section is liable on summary
10
conviction to a fine not exceeding level 3 on the standard scale.
(6)
This section does not apply in relation to the provision by a company of a
summary financial statement (see section 408).
419
Requirements in connection with publication of non-statutory accounts
(1)
If a company publishes non-statutory accounts, it must publish with them a
15
statement indicating—
(a)
that they are not the company’s statutory accounts,
(b)
whether statutory accounts dealing with any financial year with which
the non-statutory accounts purport to deal have been delivered to the
registrar,
20
(c)
whether an auditor’s report has been made on the company’s statutory
accounts for any such financial year, and if so whether the report—
(i)
was qualified or unqualified, or included a reference to any
matters to which the auditor drew attention by way of emphasis
without qualifying the report, or
25
(ii)
contained a statement under section 488(2) (accounting records
or returns inadequate or accounts or directors’ remuneration
report not agreeing with records and returns), or section 488(3)
(failure to obtain necessary information and explanations); and
(d)
whether any report has been made on the company’s statutory
30
accounts for any such financial year for the purposes of section 466
(small charities: independent examiner’s report in lieu of audit), and if
so whether that report was qualified.
(2)
The company must not publish with non-statutory accounts—
(a)
the auditor’s report on the company’s statutory accounts, or
35
(b)
where the company is exempt from audit under section 466, any report
made for the purposes of that section.
(3)
References in this section to the publication by a company of “non-statutory
accounts” are to the publication of—
(a)
any balance sheet or profit and loss account relating to, or purporting
40
to deal with, a financial year of the company, or
(b)
an account in any form purporting to be a balance sheet or profit and
loss account for the group consisting of the company and its subsidiary
undertakings relating to, or purporting to deal with, a financial year of
the company,
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otherwise than as part of the company’s statutory accounts.

Company Law Reform Bill [HL]
Part 15 — Accounts and reports
Chapter 8 — Public companies: laying of accounts and reports before general meeting
195

(4)
If a company contravenes any provision of this section, an offence is committed
by—
(a)
the company, and
(b)
every officer of the company who is in default.
(5)
A person guilty of an offence under this section is liable on summary
5
conviction to a fine not exceeding level 3 on the standard scale.
(6)
This section does not apply in relation to the provision by a company of a
summary financial statement (see section 408).
420
Meaning of “publication” in relation to accounts and reports
(1)
This section has effect for the purposes of—
10
section 417 (name of signatory to be stated in published copies of accounts
and reports),
section 418 (requirements in connection with publication of statutory
accounts), and
section 419 (requirements in connection with publication of non-statutory
15
accounts).
(2)
For the purposes of those sections a company is regarded as publishing a
document if it publishes, issues or circulates it or otherwise makes it available
for public inspection in a manner calculated to invite members of the public
generally, or any class of members of the public, to read it.
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Chapter 8
Public companies: laying of accounts and reports before general meeting
421
Public companies: laying of accounts and reports before general meeting
(1)
The directors of a public company must lay before the company in general
meeting copies of its annual accounts and reports.
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(2)
This section must be complied with not later than the end of the period for
filing the accounts and reports in question.
(3)
In the Companies Acts “accounts meeting”, in relation to a public company,
means a general meeting of the company at which the company’s annual
accounts and reports are (or are to be) laid in accordance with this section.
30
422
Public companies: offence of failure to lay accounts and reports
(1)
If the requirements of section 421 (public companies: laying of accounts and
reports before general meeting) are not complied with before the end of the
period allowed, every person who immediately before the end of that period
was a director of the company commits an offence.
35
(2)
It is a defence for a person charged with such an offence to prove that he took
all reasonable steps for securing that those requirements would be complied
with before the end of that period.
(3)
It is not a defence to prove that the documents in question were not in fact
prepared as required by this Part.
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Company Law Reform Bill [HL]
Part 15 — Accounts and reports
Chapter 9 — Quoted companies: members’ approval of directors’ remuneration report
196

(4)
A person guilty of an offence under this section is liable on summary
conviction to a fine not exceeding level 5 on the standard scale and, for
continued contravention, a daily default fine not exceeding one-tenth of level
5 on the standard scale.
Chapter 9
5
Quoted companies: members’ approval of directors’ remuneration report
423
Quoted companies: members’ approval of directors’ remuneration report
(1)
A quoted company must, prior to the accounts meeting, give to the members
of the company entitled to be sent notice of the meeting notice of the intention
to move at the meeting, as an ordinary resolution, a resolution approving the
10
directors’ remuneration report for the financial year.
(2)
The notice may be given in any manner permitted for the service on the
member of notice of the meeting.
(3)
The business that may be dealt with at the accounts meeting includes the
resolution.
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This is so notwithstanding any default in complying with subsection (1) or (2).
(4)
The existing directors must ensure that the resolution is put to the vote of the
meeting.
(5)
No entitlement of a person to remuneration is made conditional on the
resolution being passed by reason only of the provision made by this section.
20
(6)
In this section—
“the accounts meeting” means the general meeting of the company before
which the company’s annual accounts for the financial year are to be
laid; and
“existing director” means a person who is a director of the company
25
immediately before that meeting.
424
Quoted companies: offences in connection with procedure for approval
(1)
In the event of default in complying with section 423(1) (notice to be given of
resolution for approval of directors’ remuneration report), an offence is
committed by every officer of the company who is in default.
30
(2)
If the resolution is not put to the vote of the accounts meeting, an offence is
committed by each existing director.
(3)
It is a defence for a person charged with an offence under subsection (2) to
prove that he took all reasonable steps for securing that the resolution was put
to the vote of the meeting.
35
(4)
A person guilty of an offence under this section is liable on summary
conviction to a fine not exceeding level 3 on the standard scale.
(5)
In this section—
“the accounts meeting” means the general meeting of the company before
which the company’s annual accounts for the financial year are to be
40
laid; and

Company Law Reform Bill [HL]
Part 15 — Accounts and reports
Chapter 10 — Filing of accounts and reports
197

“existing director” means a person who is a director of the company
immediately before that meeting.
Chapter 10
Filing of accounts and reports
Duty to file accounts and reports
5
425
Duty to file accounts and reports with the registrar
(1)
The directors of a company must deliver to the registrar for each financial year
the accounts and reports required by—
section 428 (filing obligations of companies subject to small companies
regime),
10
section 429 (filing obligations of medium-sized companies),
section 430 (filing obligations of unquoted companies), or
section 431 (filing obligations of quoted companies).
(2)
This is subject to section 432 (unlimited companies exempt from filing
obligations).
15
426
Period allowed for filing accounts
(1)
This section specifies the period allowed for the directors of a company to
comply with their obligation under section 425 to deliver accounts and reports
for a financial year to the registrar.

This is referred to in the Companies Acts as the “period for filing” those
20
accounts and reports.
(2)
The period is—
(a)
for a private company, nine months after the end of the relevant
accounting reference period, and
(b)
for a public company, six months after the end of that period.
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This is subject to the following provisions of this section.
(3)
If the relevant accounting reference period is the company’s first and is a
period of more than twelve months, the period is—
(a)
nine months or six months, as the case may be, from the first
anniversary of the incorporation of the company, or
30
(b)
three months after the end of the accounting reference period,

whichever last expires.
(4)
If the relevant accounting reference period is treated as shortened by virtue of
a notice given by the company under section 374 (alteration of accounting
reference date), the period is—
35
(a)
that applicable in accordance with the above provisions, or
(b)
three months from the date of the notice under that section,

whichever last expires.
(5)
If for any special reason the Secretary of State thinks fit he may, on an
application made before the expiry of the period otherwise allowed, by notice
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Company Law Reform Bill [HL]
Part 15 — Accounts and reports
Chapter 10 — Filing of accounts and reports
198

in writing to a company extend that period by such further period as may be
specified in the notice.
(6)
Whether the period allowed is that for a private company or a public company
is determined by reference to the company’s status immediately before the end
of the relevant accounting reference period.
5
(7)
In this section “the relevant accounting reference period” means the accounting
reference period by reference to which the financial year for the accounts in
question was determined.
427
Calculation of period allowed
(1)
This section applies for the purposes of calculating the period for filing a
10
company’s accounts and reports which is expressed as a specified number of
months from a specified date or after the end of a specified previous period.
(2)
Subject to the following provisions, the period ends with the date in the
appropriate month corresponding to the specified date or the last day of the
specified previous period.
15
(3)
If the specified date, or the last day of the specified previous period, is the last
day of a month, the period ends with the last day of the appropriate month
(whether or not that is the corresponding date).
(4)
If—
(a)
the specified date, or the last day of the specified previous period, is not
20
the last day of a month but is the 29th or 30th, and
(b)
the appropriate month is February,

the period ends with the last day of February.
(5)
“The appropriate month” means the month that is the specified number of
months after the month in which the specified date, or the end of the specified
25
previous period, falls.
Filing obligations of different descriptions of company
428
Filing obligations of companies subject to small companies regime
(1)
The directors of a company subject to the small companies regime—
(a)
must deliver to the registrar for each financial year a copy of a balance
30
sheet drawn up as at the last day of that year, and
(b)
may also deliver to the registrar—
(i)
a copy of the company’s profit and loss account for that year,
and
(ii)
a copy of the directors’ report for that year.
35
(2)
The directors must also deliver to the registrar a copy of the auditor’s report on
those accounts (and on the directors’ report).
(3)
Subsection (2) does not apply if the company is exempt from audit and the
directors have taken advantage of that exemption.

If the company is exempt from audit by virtue of section 466 (small charities:
40
independent examiner’s report in lieu of audit), a copy of the independent
examiner’s report for the purposes of that section must be delivered instead.

Company Law Reform Bill [HL]
Part 15 — Accounts and reports
Chapter 10 — Filing of accounts and reports
199

(4)
The copies of accounts and reports delivered to the registrar must be copies of
the company’s annual accounts and reports, except that where the company
prepares Companies Act accounts—
(a)
the directors may deliver to the registrar a copy of a balance sheet
drawn up in accordance with regulations made by the Secretary of
5
State, and
(b)
there may be omitted from the copy profit and loss account delivered
to the registrar such items as may be specified by the regulations.

These are referred to in this Part as “abbreviated accounts”.
(5)
If abbreviated accounts are delivered to the registrar the obligation to deliver a
10
copy of the auditor’s report on the accounts is to deliver a copy of the special
auditor’s report required by section 433.
(6)
Where the directors of a company subject to the small companies regime
deliver to the registrar IAS accounts, or Companies Act accounts that are not
abbreviated accounts, and in accordance with this section—
15
(a)
do not deliver to the registrar a copy of the company’s profit and loss
account, or
(b)
do not deliver to the registrar a copy of the directors’ report,

the copy of the balance sheet delivered to the registrar must contain in a
prominent position a statement that the company’s annual accounts and
20
reports have been delivered in accordance with the provisions applicable to
companies subject to the small companies regime.
(7)
The copies of the balance sheet and any directors’ report delivered to the
registrar under this section must state the name of the person who signed it on
behalf of the board.
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(8)
The copy of the auditor’s report delivered to the registrar under this section
must—
(a)
state the name of the auditor and (where the auditor is a firm) the name
of the person who signed it as senior statutory auditor, or
(b)
if the conditions in section 496 (circumstances in which names may be
30
omitted) are met, state that a resolution has been passed and notified to
the Secretary of State in accordance with that section.
429
Filing obligations of medium-sized companies
(1)
The directors of a company that qualifies as a medium-sized company in
relation to a financial year (see sections 449 to 451) must deliver to the registrar
35
a copy of—
(a)
the company’s annual accounts, and
(b)
the directors’ report.
(2)
They must also deliver to the registrar a copy of the auditor’s report on those
accounts (and on the directors’ report).
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This does not apply if the company is exempt from audit and the directors have
taken advantage of that exemption.
(3)
Where the company prepares Companies Act accounts, the directors may
deliver to the registrar a copy of the company’s annual accounts for the
financial year—
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(a)
that includes a profit and loss account in which items are combined in
accordance with regulations made by the Secretary of State, and