Companies Act 2006

Individual accountsU.K.

394Duty to prepare individual accountsU.K.

The directors of every company must prepare accounts for the company for each of its financial years [F1unless the company is exempt from that requirement under section 394A].

Those accounts are referred to as the company's “individual accounts”.

[F2 394A Individual accounts: exemption for dormant subsidiariesU.K.

(1)A company is exempt from the requirement to prepare individual accounts for a financial year if—

(a)it is itself a subsidiary undertaking,

(b)it has been dormant throughout the whole of that year, and

(c) its parent undertaking is established under the law of [F3any part of the United Kingdom].

(2)Exemption is conditional upon compliance with all of the following conditions—

(a)all members of the company must agree to the exemption in respect of the financial year in question,

(b)the parent undertaking must give a guarantee under section 394C in respect of that year,

(c)the company must be included in the consolidated accounts drawn up for that year or to an earlier date in that year by the parent undertaking in accordance with—

[F4(i)if the undertaking is a company, the requirements of this Part of this Act, or, if the undertaking is not a company, the legal requirements which apply to the drawing up of consolidated accounts for that undertaking, or]

(ii)[F5UK-adopted international accounting standards],

(d)the parent undertaking must disclose in the notes to the consolidated accounts that the company is exempt from the requirement to prepare individual accounts by virtue of this section, and

(e)the directors of the company must deliver to the registrar within the period for filing the company's accounts and reports for that year—

(i)a written notice of the agreement referred to in subsection (2)(a),

(ii)the statement referred to in section 394C(1),

(iii)a copy of the consolidated accounts referred to in subsection (2)(c),

(iv)a copy of the auditor's report on those accounts, and

(v)a copy of the consolidated annual report drawn up by the parent undertaking.

394B Companies excluded from the dormant subsidiaries exemptionU.K.

A company is not entitled to the exemption conferred by section 394A (dormant subsidiaries) if it was at any time within the financial year in question—

[F6(a)a traded company,]

(b)a company that—

(i) is an authorised insurance company, a banking company, an e-money issuer, a MiFID investment firm or a UCITS management company, or

(ii)carries on insurance market activity, or

(c) a special register body as defined in section 117(1) of the Trade Union and Labour Relations (Consolidation) Act 1992 (c 52) or an employers' association as defined in section 122 of that Act or Article 4 of the Industrial Relations (Northern Ireland) Order 1992 ( S.I. 1992/807) ( NI 5).

394C Dormant subsidiaries exemption: parent undertaking declaration of guaranteeU.K.

(1)A guarantee is given by a parent undertaking under this section when the directors of the subsidiary company deliver to the registrar a statement by the parent undertaking that it guarantees the subsidiary company under this section.

(2)The statement under subsection (1) must be authenticated by the parent undertaking and must specify—

(a)the name of the parent undertaking,

[F7(b)the registered number (if any) of the parent undertaking,]

F8(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(d)the name and registered number of the subsidiary company in respect of which the guarantee is being given,

(e)the date of the statement, and

(f)the financial year to which the guarantee relates.

(3)A guarantee given under this section has the effect that—

(a)the parent undertaking guarantees all outstanding liabilities to which the subsidiary company is subject at the end of the financial year to which the guarantee relates, until they are satisfied in full, and

(b)the guarantee is enforceable against the parent undertaking by any person to whom the subsidiary company is liable in respect of those liabilities.]

395Individual accounts: applicable accounting frameworkU.K.

(1)A company's individual accounts may be prepared—

(a)in accordance with section 396 (“Companies Act individual accounts”), or

(b)in accordance with [F9UK-adopted international accounting standards] (“IAS individual accounts”).

This is subject to the following provisions of this section and to section 407 (consistency of financial reporting within group).

(2)The individual accounts of a company that is a charity must be Companies Act individual accounts.

(3)After the first financial year in which the directors of a company prepare IAS individual accounts (“the first IAS year”), all subsequent individual accounts of the company must be prepared in accordance with [F10UK-adopted international accounting standards] unless there is a relevant change of circumstance. [F11This is subject to subsection (4A).]

(4)There is a relevant change of circumstance if, at any time during or after the first IAS year—

(a)the company becomes a subsidiary undertaking of another undertaking that does not prepare IAS individual accounts,

[F12(aa)the company ceases to be a subsidiary undertaking,]

(b)the company ceases to be a company with securities admitted to trading on a [F13UK regulated market], or

(c)a parent undertaking of the company ceases to be an undertaking with securities admitted to trading on a [F14UK regulated market].

[F15(4A) After a financial year in which the directors of a company prepare IAS individual accounts for the company, the directors may change to preparing Companies Act individual accounts for a reason other than a relevant change of circumstance provided they have not changed to Companies Act individual accounts in the period of five years preceding the first day of that financial year.

(4B)In calculating the five year period for the purpose of subsection (4A), no account should be taken of a change due to a relevant change of circumstance.]

(5)If, having changed to preparing Companies Act individual accounts F16. . . , the directors again prepare IAS individual accounts for the company, subsections (3) and (4) apply again as if the first financial year for which such accounts are again prepared were the first IAS year.

396Companies Act individual accountsU.K.

[F17(A1)Companies Act individual accounts must state—

(a)the part of the United Kingdom in which the company is registered,

(b)the company’s registered number,

(c)whether the company is a public or a private company and whether it is limited by shares or by guarantee,

(d)the address of the company’s registered office, and

(e)where appropriate, the fact that the company is being wound-up.]

(1)Companies Act individual accounts must comprise—

(a)a balance sheet as at the last day of the financial year, and

(b)a profit and loss account.

(2)The accounts must—

(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 profit or loss of the company for the financial year.

[F18(2A)In the case of the individual accounts of a company which qualifies as a micro-entity in relation to the financial year (see sections 384A and 384B), the micro-entity minimum accounting items included in the company’s accounts for the year are presumed to give the true and fair view required by subsection (2).]

(3)The accounts must comply with provision made by the Secretary of State by regulations as to—

(a)the form and content of the balance sheet and profit and loss account, and

(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 to them.

(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 view.

Particulars of any such departure, the reasons for it and its effect must be given in a note to the accounts.

[F19(6)Subsections (4) and (5) do not apply in relation to the micro-entity minimum accounting items included in the individual accounts of a company for a financial year in relation to which the company qualifies as a micro-entity.]

[F20397. IAS individual accountsU.K.

(1)IAS individual accounts must state—

(a)the part of the United Kingdom in which the company is registered,

(b)the company’s registered number,

(c)whether the company is a public or a private company and whether it is limited by shares or by guarantee,

(d)the address of the company’s registered office, and

(e)where appropriate, the fact that the company is being wound-up.

(2)The notes to the accounts must state that the accounts have been prepared in accordance with [F21UK-adopted international accounting standards].]