The Companies Act 2006 (CA 2006) is the primary legislation governing the formation, operation, and dissolution of companies in the United Kingdom. The CA 2006 sets out a number of requirements for the accounting and reporting of companies. In the following article, we’ll take you through these requirements, which include the preparation of annual accounts, the appointment of an auditor, and the filing of accounts with the Companies House.

The accounting and reporting requirements under the CA 2006 are designed to ensure that shareholders and other stakeholders have access to accurate and reliable information about the financial performance and position of a company. The requirements also help to protect creditors and other third parties by ensuring that companies are transparent about their financial affairs.

The Requirements for Annual Accounts

Under the CA 2006, all companies must prepare annual accounts for each financial year. The annual accounts must include a balance sheet, a profit and loss account, a directors’ report, and a statement of cash flows. The annual accounts must be prepared in accordance with accounting standards, which are issued by the Financial Reporting Council (FRC).

The balance sheet must show the assets and liabilities of a company at the end of the financial year. The profit and loss account must show the income and expenses of a company for the financial year. The directors’ report must provide a summary of the company’s activities during the financial year and include a discussion of the company’s financial performance and position. The statement of cash flows must show the inflows and outflows of cash during the financial year.

The Appointment of an Auditor

All companies with over £5.1 million in assets or more than 250 employees must appoint an auditor to audit their annual accounts. The auditor is responsible for expressing an opinion on whether the annual accounts give a true and fair view of the company’s financial position and performance.

The Filing of Accounts with Companies House

Companies House is a government agency that maintains a public register of companies in the UK. Under the CA 2006, all companies must file their annual accounts with Companies House within 10 months of the end of the financial year.

The annual accounts filed with the Companies House are available to the public so that shareholders and other stakeholders can access information about the financial performance and position of a company.

What Happens if You Don’t File Your Annual Accounts?

If a company fails to file its annual accounts on time, it faces a number of consequences which can be serious and may include:

  • Civil penalties: The company may be liable to a civil penalty of up to £1,000 per month for each month the accounts are late.
  • Criminal prosecution: The company directors may be prosecuted for failing to file the accounts. If convicted, they could face a fine of up to £5,000 or imprisonment for up to two years.
  • Dissolution of the company: If the company fails to file its accounts for two consecutive years, it may be struck off the Companies House register. This means that the company will cease to exist.

To help you avoid penalties and potential prosecution, here are some tips for filing your annual accounts on time:

  • Start early: Don’t wait until the last minute to prepare your annual accounts. This will give you enough time to gather all the necessary information and ensure the accounts are accurate.
  • Get help from a professional: If you are unsure how to prepare your annual accounts, you can get help from a qualified accountant.
  • File your accounts online: You can file your annual accounts online through the Companies House website. This is the quickest and easiest way to file your accounts.

Who can help me with my annual accounts?

The CA 2006 sets out the requirements for filing annual accounts, and several different people can help with this process.

  • Accountants: Accountants are qualified professionals who can help you prepare your annual accounts and file them with Companies House. They will have the knowledge and experience to ensure your accounts are accurate and compliant with the CA 2006.
  • Company formation agents: Company formation agents can also help you file your annual accounts. They may not have the same level of expertise as accountants, but they can provide a more affordable option.
  • Law firms: Law firms can also help you file your annual accounts. They will have the expertise to ensure that your accounts are compliant with the CA 2006, and can also provide legal advice on other matters relating to your company.

Whichever option you choose, it is important to ensure the person or firm you use is qualified and experienced in filing annual accounts. This will help ensure that your accounts are filed correctly and on time and that you avoid any potential penalties.

Here are some tips for choosing a company to help you file your annual accounts:

  • Get recommendations from friends, family, or colleagues.
  • Check the company’s credentials and experience.
  • Get quotes from multiple companies before making a decision.
  • Make sure the company is familiar with the CA 2006.

By following these tips, you can ensure you file your annual accounts on time and avoid the consequences of non-compliance.

Facing Closure – Do You Need Help?

If you have found yourself in a situation where you might be facing company dissolution as a result of CA 2006, we are here to help. At Leading UK, we can clearly explain the options to rescue your business, stabilise and regain control to avoid closure. However, if closure is on the cards, we will guide you through the process.