Companies Act 2006

456Application to court in respect of defective accounts or reports

(1)An application may be made to the court—

(a)by the Secretary of State, after having complied with section 455, or

(b)by a person authorised by the Secretary of State for the purposes of this section,

for a declaration (in Scotland, a declarator) that the annual accounts of a company do not comply, or a directors' report does not comply, with the requirements of this Act (or, where applicable, of Article 4 of the IAS Regulation) and for an order requiring the directors of the company to prepare revised accounts or a revised report.

(2)Notice of the application, together with a general statement of the matters at issue in the proceedings, shall be given by the applicant to the registrar for registration.

(3)If the court orders the preparation of revised accounts, it may give directions as to—

(a)the auditing of the accounts,

(b)the revision of any directors' remuneration report, directors' report or summary financial statement, and

(c)the taking of steps by the directors to bring the making of the order to the notice of persons likely to rely on the previous accounts,

and such other matters as the court thinks fit.

(4)If the court orders the preparation of a revised directors' report it may give directions as to—

(a)the review of the report by the auditors,

(b)the revision of any summary financial statement,

(c)the taking of steps by the directors to bring the making of the order to the notice of persons likely to rely on the previous report, and

(d)such other matters as the court thinks fit.

(5)If the court finds that the accounts or report did not comply with the requirements of this Act (or, where applicable, of Article 4 of the IAS Regulation) it may order that all or part of—

(a)the costs (in Scotland, expenses) of and incidental to the application, and

(b)any reasonable expenses incurred by the company in connection with or in consequence of the preparation of revised accounts or a revised report,

are to be borne by such of the directors as were party to the approval of the defective accounts or report.

For this purpose every director of the company at the time of the approval of the accounts or report shall be taken to have been a party to the approval unless he shows that he took all reasonable steps to prevent that approval.

(6)Where the court makes an order under subsection (5) it shall have regard to whether the directors party to the approval of the defective accounts or report knew or ought to have known that the accounts or report did not comply with the requirements of this Act (or, where applicable, of Article 4 of the IAS Regulation), and it may exclude one or more directors from the order or order the payment of different amounts by different directors.

(7)On the conclusion of proceedings on an application under this section, the applicant must send to the registrar for registration a copy of the court order or, as the case may be, give notice to the registrar that the application has failed or been withdrawn.

(8)The provisions of this section apply equally to revised annual accounts and revised directors' reports, in which case they have effect as if the references to revised accounts or reports were references to further revised accounts or reports.