206 13: Company formation Part D The formation and constitution of business organisations
The accounts must be audited. The auditors' report must be attached to the copies issued to members,
filed with the Registrar or published. Exemptions apply to small and dormant companies, though
members may require an audit. The accounts must also be accompanied by a directors' report giving
information on a number of prescribed matters. These include (where an audit was necessary) a statement
that there is no relevant information of which the auditors are unaware, and another statement from the
directors that they exercised due skill and care in the period. Quoted companies must submit the
directors' remuneration report.
Each member and debentureholder is entitled to be sent a copy of the annual accounts, together with the
directors' and auditor's reports. In the case of public companies, they should be sent at least 21 days
before the meeting at which they shall be laid. In the case of private companies they should be sent at the
same time as the documents are filed, if not earlier.
Anyone else entitled to receive notice of a general meeting, including the company's auditor, should also
receive a copy. At any other time any member or debentureholder is entitled to a copy free of charge
within seven days of requesting it.
All companies may prepare summary financial statements to be circulated to members instead of the full
accounts, subject to various requirements as to form and content being met. However, members have the
right to receive full accounts should they wish to.
Quoted companies must make their annual accounts and reports available on a website which identifies
the company and is maintained on the company’s behalf. The documents must be made available as soon
as reasonably practicable and access should not be conditional on the payment of a fee or subject to other
restrictions.
Where the company or its directors fail to comply with the Act, they may be subject to a fine.PER 10 requires you to recognise and apply the external legal and professional framework and regulations
to financial reporting. This section will help you understand some legal requirements relating to when the
financial reports should be published and their contents.5 Statutory returns
Every company must make an annual return to the Registrar.Every company must make an annual return each year to the Registrar which is made up to a 'return
date'. This date is either the anniversary of incorporation or the anniversary of the date of the previous
return (if this differs).
The form of the annual return prescribed for a company which has share capital is:
The address of the registered office of the company
The address (if different) at which the register of members or debentureholders is kept
The type of company and its principal business activities
The total number of issued shares, their aggregate nominal value and the amounts paid and
unpaid on each share
For each class of share, the rights of those shares, the total number of shares in that class and
their total nominal value
Particulars of members of the company
Particulars of those who have ceased to be members since the last return
The number of shares of each class held by members at the return date, and transferred by
members since incorporation or the last return date
The particulars of directors, and secretary (if applicable)FAST FORWARD