316 Chapter 11Companies (2): Management, control and winding up
A £30 annual fee is charged for registration of the annual return. This fee is reduced
to £15 if the return is filed electronically. The Registrar operates a shuttle system. This
involves sending the company the information contained in the previous year’s annual
return and asking that changes are notified, or that the company indicates that no changes
have been made. The return must be signed by a director or the company secretary. The
annual return can be inspected at Companies House without this fact being revealed to
the company.Accounts and accounting records
Companies are under a duty to keep accounting records, and to prepare annual accounts.Accounting records
Section 386 of the Act requires every company to keep accounting records for inspection by
the officers of the company. These are not the same as the accounts, but are the documents
which enable the accounts to be prepared, e.g. ledger, order forms, cash books, receipts, etc.
They must show with reasonable accuracy the financial position of the company at any
particular moment.The annual accounts
A company’s accounts consist of a balance sheet, a profit and loss account, the director’s
report and the auditor’s report.
Every company will have an accounting reference period and an accounting reference
date. The period from one accounting reference date to the next makes up the company’s
financial year and is its accounting reference period.
Section 415 requires the directors to prepare a directors’ reportfor each financial year.
This should contain a fair view of the development of the company’s business and of the
company’s position at the end of the financial year. If the directors are recommending
a dividend this must be stated in the report. The directors’ report is therefore of consider-
able interest to shareholders. Either the company secretary or any director may sign the
directors’ report, but it must be approved by the board of directors.
The profit and loss accountshows the income and expenses of the company over the
financial year. If the income exceeds the expenditure the company will have made a profit;
if it is less than the expenditure the company will have made a loss. Capital profits, which
arise when the company sells a fixed asset such as land, are generally included as an excep-
tional item.
The balance sheetshows the assets and liabilities of the company on a particular date.
The auditor’s reportmust certify that in the auditor’s opinion the books give a true and fair
reflection of the company’s financial position and have been properly prepared in accord-
ance with the Companies Act 2006.
A copy of the annual accounts must be sent to every member of the company, whether
the company is public or private. The directors of a public companymust lay the annual
accounts before a general meeting of the members. The annual accounts must also be
registered with the Registrar of Companies. Public companies have six months from
their accounting reference date in which to do this, and private companies have nine
months.