Companies Act 1989

Part IU.K. Amendments of the Companies Act 1985

1U.K.In section 46 (meaning of “unqualified” auditors’ report in section 43(3)), for subsections (2) to (6) substitute—

“(2)If the balance sheet was prepared for a financial year of the company, the reference is to an auditors’ report stating without material qualification the auditors’ opinion that the balance sheet has been properly prepared in accordance with this Act.

(3)If the balance sheet was not prepared for a financial year of the company, the reference is to an auditors’ report stating without material qualification the auditors’ opinion that the balance sheet has been properly prepared in accordance with the provisions of this Act which would have applied if it had been so prepared.

For the purposes of an auditors’ report under this subsection the provisions of this Act shall be deemed to apply with such modifications as are necessary by reason of the fact that the balance sheet is not prepared for a financial year of the company.

(4)A qualification shall be regarded as material unless the auditors state in their report that the matter giving rise to the qualification is not material for the purpose of determining (by reference to the company’s balance sheet) whether at the balance sheet date the amount of the company’s net assets was not less than the aggregate of its called up share capital and undistributable reserves.

In this subsection “net assets” and “undistributable reserves” have the meaning given by section 264(2) and (3).”.

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9U.K.In section 289(4) for “section 252(5)” substitute “section 250(3)”.

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12U.K.In section 699(3) for “section 241(3)” substitute “section 242(1)”.

13U.K.In Part XXIII (oversea companies), for Chapter II (delivery of accounts) substitute—

“Chapter IIU.K. Delivery of Accounts and Reports

700 Preparation of accounts and reports by oversea companies.

(1)Every oversea company shall in respect of each financial year of the company prepare the like accounts and directors’ report, and cause to be prepared such an auditors’ report, as would be required if the company were formed and registered under this Act.

(2)The Secretary of State may by order—

(a)modify the requirements referred to in subsection (1) for the purpose of their application to oversea companies;

(b)exempt an oversea company from those requirements or from such of them as may be specified in the order.

(3)An order may make different provision for different cases or classes of case and may contain such incidental and supplementary provisions as the Secretary of State thinks fit.

(4)An order under this section shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

701 Oversea company’s financial year and accounting reference periods.

(1)Sections 223 to 225 (financial year and accounting reference periods) apply to an oversea company, subject to the following modifications.

(2)For the references to the incorporation of the company substitute references to the company establishing a place of business in Great Britain.

(3)Omit section 225(4) (restriction on frequency with which current accounting reference period may be extended).

702 Delivery to registrar of accounts and reports of oversea company.

(1)An oversea company shall in respect of each financial year of the company deliver to the registrar copies of the accounts and reports prepared in accordance with section 700.

If any document comprised in those accounts or reports is in a language other than English, the directors shall annex to the copy delivered a translation of it into English, certified in the prescribed manner to be a correct translation.

(2)In relation to an oversea company the period allowed for delivering accounts and reports is 13 months after the end of the relevant accounting reference period.

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 12 months, the period allowed is 13 months from the first anniversary of the company’s establishing a place of business in Great Britain.

(4)If the relevant accounting period is treated as shortened by virtue of a notice given by the company under section 225 (alteration of accounting reference date), the period allowed is that applicable in accordance with the above provisions or 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 in writing to an oversea company extend that period by such further period as may be specified in the notice.

(6)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.

703 Penalty for non-compliance.

(1)If the requirements of section 702(1) are not complied with before the end of the period allowed for delivering accounts and reports, or if the accounts and reports delivered do not comply with the requirements of this Act, the company and every person who immediately before the end of that period was a director of the company is guilty of an offence and liable to a fine and, for continued contravention, to a daily default fine.

(2)It is a defence for a person charged with such an offence to prove that he took all reasonable steps for securing that the requirements in question would be complied with.

(3)It is not a defence in relation to a failure to deliver copies to the registrar to prove that the documents in question were not in fact prepared as required by this Act.”.

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15U.K.For section 742 (expressions used in connection with accounts) substitute—

“742 Expressions used in connection with accounts.

(1)In this Act, unless a contrary intention appears, the following expressions have the same meaning as in Part VII (accounts)—

• “annual accounts”,

• “accounting reference date” and “accounting reference period”,

• “balance sheet” and “balance sheet date”,

• “current assets”,

• “financial year”, in relation to a company,

• “fixed assets”,

• “parent company” and “parent undertaking”,

• “profit and loss account”, and

• “subsidiary undertaking”.

(2)References in this Act to “realised profits” and “realised losses”, in relation to a company’s accounts, shall be construed in accordance with section 262(3).”.

16U.K.In section 744 (interpretation), omit the definition of “authorised institution” and at the appropriate place insert—

““banking company” means a company which is authorised under the Banking Act 1987;”.

17U.K.In Schedule 1, in paragraph 2(2)(a) for “section 252(5)” substitute “section 250(3)”.

18(1)Schedule 2 (interpretation of references to “beneficial interest”) is amended as follows.U.K.

(2)After the heading at the beginning of the Schedule, and before the cross-heading preceding paragraph 1, insert the following heading—

“Part IU.K. References in Sections 23, 145, 146 and 148”.

(3)In paragraph 1—

(a)in sub-paragraph (1) omit “paragraph 60(2) of Schedule 4, or paragraph 19(3) of Schedule 9”; and

(b)omit sub-paragraph (5).

(4)In paragraph 3—

(a)in sub-paragraph (1) omit “, paragraph 60(2) of Schedule 4 or paragraph 19(3) of Schedule 9”; and

(b)omit sub-paragraph (3).

(5)In paragraph 4—

(a)in sub-paragraph (1) omit “(whether as personal representative or otherwise)”, and

(b)in sub-paragraph (2) omit “, paragraph 60(2) of Schedule 4 and paragraph 19(3) of Schedule 9”;and at the end add—

“(3)As respects sections 145, 146 and 148, sub-paragraph (1) above applies where a company is a personal representative as it applies where a company is a trustee.”.

(6)In paragraph 5(1) for “this Schedule” substitute “this Part of this Schedule”.

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24(1)Schedule 24 (punishment of offences) is amended as follows.U.K.

(2)The existing entries for provisions in Part VII are amended as follows, and shall be re-ordered according to the new order of the sections in that Part:

(3)At the appropriate places insert the following new entries—

(4)In the entry for section 703(1) (failure by oversea company to comply with requirements as to accounts and reports), in column 2 for the words from “s.700” to the end substitute “requirements as to accounts and reports”.