|
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395 | Where and for how long records to be kept: offences |
| |
(1) | If a company fails to comply with any provision of subsections (1) to (3) of |
| |
section 394 (requirements as to keeping of accounting records), an offence is |
| |
committed by every officer of the company who is in default. |
| |
(2) | It is a defence for a person charged with such an offence to show that he acted |
| 5 |
honestly and that in the circumstances in which the company’s business was |
| |
carried on the default was excusable. |
| |
(3) | An officer of a company commits an offence if he— |
| |
(a) | fails to take all reasonable steps for securing compliance by the |
| |
company with subsection (4) of that section (period for which records |
| 10 |
| |
(b) | intentionally causes any default by the company under that subsection. |
| |
(4) | A person guilty of an offence under this section is liable— |
| |
(a) | on conviction on indictment, to imprisonment for a term not exceeding |
| |
two years or a fine (or both); |
| 15 |
(b) | on summary conviction— |
| |
(i) | in England and Wales, to imprisonment for a term not |
| |
exceeding twelve months or to a fine not exceeding the |
| |
statutory maximum (or both); |
| |
(ii) | in Scotland or Northern Ireland, to imprisonment for a term not |
| 20 |
exceeding six months, or to a fine not exceeding the statutory |
| |
| |
| |
A company’s financial year |
| |
396 | A company’s financial year |
| 25 |
(1) | A company’s financial year is determined as follows. |
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(2) | Its first financial year— |
| |
(a) | begins with the first day of its first accounting reference period, and |
| |
(b) | ends with the last day of that period or such other date, not more than |
| |
seven days before or after the end of that period, as the directors may |
| 30 |
| |
(3) | Subsequent financial years— |
| |
(a) | begin with the day immediately following the end of the company’s |
| |
previous financial year, and |
| |
(b) | end with the last day of its next accounting reference period or such |
| 35 |
other date, not more than seven days before or after the end of that |
| |
period, as the directors may determine. |
| |
(4) | In relation to an undertaking that is not a company, references in this Act to its |
| |
financial year are to any period in respect of which a profit and loss account of |
| |
the undertaking is required to be made up (by its constitution or by the law |
| 40 |
under which it is established), whether that period is a year or not. |
| |
|
| |
|
| |
|
(5) | The directors of a parent company must secure that, except where in their |
| |
opinion there are good reasons against it, the financial year of each of its |
| |
subsidiary undertakings coincides with the company’s own financial year. |
| |
397 | Accounting reference periods and accounting reference date |
| |
(1) | A company’s accounting reference periods are determined according to its |
| 5 |
accounting reference date in each calendar year. |
| |
(2) | The accounting reference date of a company incorporated in Great Britain |
| |
before 1st April 1996 is— |
| |
(a) | the date specified by notice to the registrar in accordance with section |
| |
224(2) of the Companies Act 1985 (c. 6) (notice specifying accounting |
| 10 |
reference date given within nine months of incorporation), or |
| |
| |
(i) | in the case of a company incorporated before 1st April 1990, 31st |
| |
| |
(ii) | in the case of a company incorporated on or after 1st April 1990, |
| 15 |
the last day of the month in which the anniversary of its |
| |
| |
(3) | The accounting reference date of a company incorporated in Northern Ireland |
| |
before 22nd August 1997 is— |
| |
(a) | the date specified by notice to the registrar in accordance with article |
| 20 |
232(2) of the Companies (Northern Ireland) Order 1986 (S.I. 1986/1032 |
| |
(N.I. 6)) (notice specifying accounting reference date given within nine |
| |
months of incorporation), or |
| |
| |
(i) | in the case of a company incorporated before the coming into |
| 25 |
operation of Article 5 of the Companies (Northern Ireland) |
| |
Order 1990 (S.I. 1990/593 (N.I. 5)), 31st March, and |
| |
(ii) | in the case of a company incorporated after the coming into |
| |
operation of that Article, the last day of the month in which the |
| |
anniversary of its incorporation falls. |
| 30 |
(4) | The accounting reference date of a company incorporated— |
| |
(a) | in Great Britain on or after 1st April 1996 and before the |
| |
commencement of this Act, |
| |
(b) | in Northern Ireland on or after 22nd August 1997 and before the |
| |
commencement of this Act, or |
| 35 |
(c) | after the commencement of this Act, |
| |
| is the last day of the month in which the anniversary of its incorporation falls. |
| |
(5) | A company’s first accounting reference period is the period of more than six |
| |
months, but not more than 18 months, beginning with the date of its |
| |
incorporation and ending with its accounting reference date. |
| 40 |
(6) | Its subsequent accounting reference periods are successive periods of twelve |
| |
months beginning immediately after the end of the previous accounting |
| |
reference period and ending with its accounting reference date. |
| |
(7) | This section has effect subject to the provisions of section 398 (alteration of |
| |
accounting reference date). |
| 45 |
|
| |
|
| |
|
398 | Alteration of accounting reference date |
| |
(1) | A company may by notice given to the registrar specify a new accounting |
| |
reference date having effect in relation to— |
| |
(a) | the company’s current accounting reference period and subsequent |
| |
| 5 |
(b) | the company’s previous accounting reference period and subsequent |
| |
| |
| A company’s “previous accounting reference period” means the one |
| |
immediately preceding its current accounting reference period. |
| |
(2) | The notice must state whether the current or previous accounting reference |
| 10 |
| |
(a) | is to be shortened, so as to come to an end on the first occasion on which |
| |
the new accounting reference date falls or fell after the beginning of the |
| |
| |
(b) | is to be extended, so as to come to an end on the second occasion on |
| 15 |
which that date falls or fell after the beginning of the period. |
| |
(3) | A notice extending a company’s current or previous accounting reference |
| |
period is not effective if given less than five years after the end of an earlier |
| |
accounting reference period of the company that was extended under this |
| |
| 20 |
| |
(a) | to a notice given by a company that is a subsidiary undertaking or |
| |
parent undertaking of another EEA undertaking if the new accounting |
| |
reference date coincides with that of the other EEA undertaking or, |
| |
where that undertaking is not a company, with the last day of its |
| 25 |
| |
(b) | where the company is in administration under Part 2 of the Insolvency |
| |
Act 1986 (c. 45) or Part 3 of the Insolvency (Northern Ireland) Order |
| |
1989 (S.I. 1989/2405 (N.I. 19)), or |
| |
(c) | where the Secretary of State directs that it should not apply, which he |
| 30 |
may do with respect to a notice that has been given or that may be |
| |
| |
(4) | A notice under this section may not be given in respect of a previous |
| |
accounting reference period if the period for filing accounts and reports for the |
| |
financial year determined by reference to that accounting reference period has |
| 35 |
| |
(5) | An accounting reference period may not be extended so as to exceed 18 months |
| |
and a notice under this section is ineffective if the current or previous |
| |
accounting reference period as extended in accordance with the notice would |
| |
| 40 |
| This does not apply where the company is in administration under Part 2 of the |
| |
Insolvency Act 1986 or Part 3 of the Insolvency (Northern Ireland) Order 1989 |
| |
(S.I. 1989/2405 (N.I. 19)). |
| |
(6) | In this section “EEA undertaking” means an undertaking established under the |
| |
law of any part of the United Kingdom or the law of any other EEA State. |
| 45 |
|
| |
|
| |
|
| |
| |
| |
399 | Accounts to give true and fair view |
| |
(1) | The directors of a company must not approve accounts for the purposes of this |
| 5 |
Chapter unless they are satisfied that they give a true and fair view of the |
| |
assets, liabilities, financial position and profit or loss— |
| |
(a) | in the case of the company’s individual accounts, of the company; |
| |
(b) | in the case of the company’s group accounts, of the undertakings |
| |
included in the consolidation as a whole, so far as concerns members of |
| 10 |
| |
(2) | The auditor of a company in carrying out his functions under this Act in |
| |
relation to the company’s annual accounts must have regard to the directors’ |
| |
duty under subsection (1). |
| |
| 15 |
400 | Duty to prepare individual accounts |
| |
| The directors of every company must prepare accounts for the company for |
| |
each of its financial years. |
| |
| Those accounts are referred to as the company’s “individual accounts”. |
| |
401 | Individual accounts: applicable accounting framework |
| 20 |
(1) | A company’s individual accounts may be prepared— |
| |
(a) | in accordance with section 402 (“Companies Act individual accounts”), |
| |
| |
(b) | in accordance with international accounting standards (“IAS |
| |
| 25 |
| This is subject to the following provisions of this section and to section 413 |
| |
(consistency of financial reporting within group). |
| |
(2) | The individual accounts of a company that is a charity must be Companies Act |
| |
| |
(3) | After the first financial year in which the directors of a company prepare IAS |
| 30 |
individual accounts (“the first IAS year”), all subsequent individual accounts |
| |
of the company must be prepared in accordance with international accounting |
| |
standards unless there is a relevant change of circumstance. |
| |
(4) | There is a relevant change of circumstance if, at any time during or after the |
| |
| 35 |
(a) | the company becomes a subsidiary undertaking of another |
| |
undertaking that does not prepare IAS individual accounts, |
| |
(b) | the company ceases to be a company with securities admitted to |
| |
trading on a regulated market in an EEA State, or |
| |
|
| |
|
| |
|
(c) | a parent undertaking of the company ceases to be an undertaking with |
| |
securities admitted to trading on a regulated market in an EEA State. |
| |
(5) | If, having changed to preparing Companies Act individual accounts following |
| |
a relevant change of circumstance, the directors again prepare IAS individual |
| |
accounts for the company, subsections (4) and (5) apply again as if the first |
| 5 |
financial year for which such accounts are again prepared were the first IAS |
| |
| |
402 | Companies Act individual accounts |
| |
(1) | Companies Act individual accounts must comprise— |
| |
(a) | a balance sheet as at the last day of the financial year, and |
| 10 |
(b) | a profit and loss account. |
| |
| |
(a) | in the case of the balance sheet, give a true and fair view of the state of |
| |
affairs of the company as at the end of the financial year, and |
| |
(b) | in the case of the profit and loss account, give a true and fair view of the |
| 15 |
profit or loss of the company for the financial year. |
| |
(3) | The accounts must comply with provision made by the Secretary of State by |
| |
| |
(a) | the form and content of the balance sheet and profit and loss account, |
| |
| 20 |
(b) | additional information to be provided by way of notes to the accounts. |
| |
(4) | If compliance with the regulations, and any other provision made by or under |
| |
this Act as to the matters to be included in a company’s individual accounts or |
| |
in notes to those accounts, would not be sufficient to give a true and fair view, |
| |
the necessary additional information must be given in the accounts or in a note |
| 25 |
| |
(5) | If in special circumstances compliance with any of those provisions is |
| |
inconsistent with the requirement to give a true and fair view, the directors |
| |
must depart from that provision to the extent necessary to give a true and fair |
| |
| 30 |
| Particulars of any such departure, the reasons for it and its effect must be given |
| |
in a note to the accounts. |
| |
403 | IAS individual accounts |
| |
Where the directors of a company prepare IAS individual accounts, they must |
| |
state in the notes to the accounts that the accounts have been prepared in |
| 35 |
accordance with international accounting standards. |
| |
Group accounts: small companies |
| |
404 | Option to prepare group accounts |
| |
| If at the end of a financial year a company subject to the small companies |
| |
regime is a parent company the directors, as well as preparing individual |
| 40 |
accounts for the year, may prepare group accounts for the year. |
| |
|
| |
|