Part VIIU.K. Accounts and Audit

Modifications etc. (not altering text)

C1Pt. VII (ss. 221–262) applied with modifications by S.I. 1985/680, regs. 4–6, Sch.

C2Part VII (ss. 221-262) continued by S.I. 1990/355, arts. 6, 7, Sch. 2 para. 13(1)(a)

C3Part VII (ss. 221-262) amended by S.I. 1990/355, arts. 6, 7, Sch. 2 para. 1(2)(5)

C4Part VII (ss. 221-262) extended by S.I. 1990/355, arts. 6, 7, Sch. 2 para. 1(3)(5)

C5Part VII (ss. 221-262) modified by S.I. 1990/355, arts. 6, 7, Sch. 2 paras. 1(4)(5), 3(2)(3)

C6Part VII (ss. 221-262) excluded by S.I. 1990/355, arts. 6, 7, Sch. 2 para. 3(1)(3)

C7Part VII (ss. 221-262) restricted by S.I. 1990/355, arts. 6, 7, Sch. 2 para. 13(1)(b)

Pt. VII (ss. 221-262) applied (with modifications) (21.7.1993) by S.I. 1993/1820, reg. 4, Sch. paras.1, 2 (as amended (1.10.2005) by S.I. 2005/1987, reg. 3)

Pt. VII (ss. 221-262) applied (with modifications) (6.4.2001) by S.I. 2001/1090, reg. 3, Sch. 1 (as amended (4.3.2004) by S.I. 2004/355, art. 8, (1.10.2005) by S.I. 2005/1989, reg. 2, Sch. 1 and (12.1.2006) by S.I. 2005/3442, reg. 2(2)(b), Sch. 2 para. 3(1))

Chapter IU.K. Provisions Applying to Companies Generally

Revision of defective accounts and reportsE+W+S

245 Voluntary revision of annual accounts or directors’ report.E+W+S

(1)If it appears to the directors of a company that any annual accounts [F1or summary financial statement] of the company, or any directors’ report F2. . . [F3or directors’ remuneration report] , did not comply with the requirements of this Act [F4(or, where applicable, of Article 4 of the IAS Regulation)] , they may prepare revised accounts or a [F5revised statement or report] .

(2)Where copies of the previous accounts [F6or report] have been laid before the company in general meeting or delivered to the registrar, the revisions shall be confined to—

(a)the correction of those respects in which the previous accounts [F6or report] did not comply with the requirements of this Act, [F4(or, where applicable, of Article 4 of the IAS Regulation)] and

(b)the making of any necessary consequential alterations.

(3)The Secretary of State may make provision by regulations as to the application of the provisions of this Act in relation to revised annual accounts [F7or a revised summary financial statement] or a revised directors’ report F8. . . [F9or a revised directors’ remuneration report] .

(4)The regulations may, in particular—

(a)make different provision according to whether the previous accounts [F10statement or report] are replaced or are supplemented by a document indicating the corrections to be made;

(b)make provision with respect to the functions of the company’s auditors [F11or reporting acountant] in relation to the revised accounts [F10statement or report] ;

(c)require the directors to take such steps as may be specified in the regulations where the previous accounts [F12or report] have been —

(i)sent out to members and others under section 238(1),

(ii)laid before the company in general meeting, or

(iii)delivered to the registrar,

or where a summary financial statement [F13containing information [F14derived from the previous accounts or report]] has been sent to members under section 251;

(d)apply the provisions of this Act (including those creating criminal offences) subject to such additions, exceptions and modifications as are specified in the regulations.

(5)Regulations 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.

Textual Amendments

F11Words in s. 245(4)(b) inserted (11.8.1994) by S.I. 1994/1935, reg. 4, Sch. 1 Pt. I para. 2

Modifications etc. (not altering text)

C10S. 245(1) and (2) excluded by S.I. 1990/2569, art. 6(2)

[F15245A Secretary of State’s notice in respect of annual accounts. E+W+S

[F16(1)Where—

(a)copies of a company's annual accounts [F17or directors' report] have been sent out under section 238, or

(b)a copy of a company's annual accounts [F17or directors' report] has been laid before the company in general meeting or delivered to the registrar,

and it appears to the Secretary of State that there is, or may be, a question whether the accounts [F18or report] comply with the requirements of this Act, he may give notice to the directors of the company indicating the respects in which it appears to him that such a question arises or may arise.]

(2)The notice shall specify a period of not less than one month for the directors to give him an explanation of the accounts [F19[F20or report] or prepare revised accounts or [F21a revised report]] .

(3)If at the end of the specified period, or such longer period as he may allow, it appears to the Secretary of State that [F22 the directors have not—

(a)given a satisfactory explanation of the accounts [F23or report] , or

(b)revised the accounts [F23or report] so as to comply with the requirements of this Act,

he may if he thinks fit apply to the court.]

[F24(4)The provisions of this section apply equally to revised annual accounts [F25and revised directors' reports] , in which case they have effect as if the references to revised accounts [F26or reports] were references to further revised accounts [F26or reports] .]]

Textual Amendments

F15New ss. 245–245C inserted (subject to the saving and transitional provisions in S.I. 1990/2569, art. 6) by Companies Act 1989 (c. 40, SIF 27), ss. 1, 12, 213(2) as part of the text inserted in place of ss. 221–262 (as mentioned in s. 1(a) of the 1989 Act)

Modifications etc. (not altering text)

C12Ss. 245A and 245B excluded by S.I. 1990/2569, art. 6(2)

245B Application to court in respect of defective accounts. E+W+S

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

(a)by the Secretary of State, after having complied with section 245A, or

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

for a declaration or declarator that the annual accounts of a company do not comply [F27, or a directors' report F28. . . does not comply,] with the requirements of this Act [F29(or, where applicable, of Article 4 of the IAS Regulation)] and for an order requiring the directors of the company to prepare revised accounts [F30or a revised report F31. . . ] .

(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 with respect to—

(a)the auditing of the accounts,

(b)the revision of any directors’ report [F32, directors’ remuneration 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.

[F33(3A)If the court orders the preparation of a revised directors' report F34. . . it may give directions with respect to—

(a)the review of the directors' report F35. . . by the auditors,

(b)the revision of any directors' report, directors' remuneration report F36. . . or 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 F37. . . , and

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

(4)If the court finds that the accounts [F38or report] did not comply with the requirements of this Act [F29(or, where applicable, of Article 4 of the IAS Regulation)] it may order that all or part of—

(a)the costs (or 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 [F39or a revised report F40. . . ] ,

shall be borne by such of the directors as were party to the approval of the [F41defective accounts or report] .

For this purpose every director of the company at the time [F42approval of the accounts or report] shall be taken to have been a party to [F43 the approval] unless he shows that he took all reasonable steps to prevent [F44that approval] .

(5)Where the court makes an order under subsection (4) it shall have regard to whether the directors party to the approval of the defective accounts [F45or report] knew or ought to have known that the accounts [F45or report] did not comply with the requirements of this Act [F29(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.

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

[F46(7)The provisions of this section apply equally to revised annual accounts [F47and revised directors' reports] , in which case they have effect as if the references to revised accounts [F48or reports] were references to further revised accounts [F48or reports] .]

Textual Amendments

F35Words in s. 245B(3A)(a) omitted (12.1.2006) by virtue of The Companies Act 1985 (Operating and Financial Review) (Repeal) Regulations 2005 (S.I. 2005/3442). reg. 2(2)(a), {Sch. 1 para. 11(3)(b)}

Modifications etc. (not altering text)

C14Ss. 245A and 245B excluded by S.I. 1990/2569, art. 6(2)

[F49245C Other persons authorised to apply to court.E+W+S

(1)The Secretary of State may authorise for the purposes of section 245B any person appearing to him—

(a)to have an interest in, and to have satisfactory procedures directed to securing, compliance by companies with [F50the requirements of this Act relating to accounts [F51and directors' reports]] , [F52(or, where applicable, of Article 4 of the IAS Regulation)]

(b)to have satisfactory procedures for receiving and investigating complaints about the [F53companies' annual accounts [F51and directors' reports]] , and

(c)otherwise to be a fit and proper person to be authorised.

[F54(1A)But where the order giving authorisation (see subsection (4)) is to contain any requirements or other provisions specified under subsection (4A), the Secretary of State may not authorise a person unless, in addition, it appears to him that the person would, if authorised, exercise his functions as an authorised person in accordance with any such requirements or provisions.]

(2)A person may be authorised generally or in respect of particular classes of case, and different persons may be authorised in respect of different classes of case.

(3)The Secretary of State may refuse to authorise a person if he considers that his authorisation is unnecessary having regard to the fact that there are one or more other persons who have been or are likely to be authorised.

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

[F55(4A)An order under subsection (4) may contain such requirements or other provisions relating to the exercise of functions by the authorised person as appear to the Secretary of State to be appropriate.

(4B)If the authorised person is an unincorporated association, any relevant proceedings may be brought by or against that association in the name of any body corporate whose constitution provides for the establishment of the association.

For this purpose “relevant proceedings” means proceedings brought in, or in connection with, the exercise of any function by the association as an authorised person.]

(5)Where authorisation is revoked, the revoking order may make such provision as the Secretary of State thinks fit with respect to pending proceedings.

(6)F56. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

Textual Amendments

F49New ss. 245–245C inserted (subject to the saving and transitional provisions in S.I. 1990/2569, art. 6) by Companies Act 1989 (c. 40, SIF 27), ss. 1, 12, 213(2) as part of the text inserted in place of ss. 221–262 (as mentioned in s. 1(a) of the 1989 Act)

Modifications etc. (not altering text)

245DDisclosure of information held by Inland Revenue to persons authorised to apply to courtE+W+S

(1)Information which is held by or on behalf of the Commissioners of Inland Revenue may be disclosed to a person who is authorised under section 245C of this Act, or under Article 253C of the Companies (Northern Ireland) Order 1986 (S.I. 1986/1032 (N.I. 6)), if the disclosure—

(a)is made for a permitted purpose, and

(b)is made by the Commissioners or is authorised by them.

(2)Such information—

(a)may be so disclosed despite any other restriction on the disclosure of information whether imposed by any statutory provision or otherwise, but

(b)in the case of personal data (within the meaning of the Data Protection Act 1998), may not be disclosed in contravention of that Act.

(3)For the purposes of subsection (1), a disclosure is made for a permitted purpose if it is made for the purpose of facilitating—

(a)the taking of steps by the authorised person to discover whether there are grounds for an application to the court under section 245B of this Act or Article 253B of the Companies (Northern Ireland) Order 1986; or

(b)a determination by the authorised person as to whether or not to make such an application.

(4)The power of the Commissioners to authorise a disclosure under subsection (1)(b) may be delegated (either generally or for a specified purpose) to an officer of the Board of Inland Revenue.

Modifications etc. (not altering text)

245ERestrictions on use and further disclosure of information disclosed under section 245DE+W+S

(1)Information that is disclosed to an authorised person under section 245D may not be used except in or in connection with—

(a)taking steps to discover whether there are grounds for an application to the court as mentioned in section 245D(3)(a);

(b)determining whether or not to make such an application; or

(c)proceedings on any such application.

(2)Information that is disclosed to an authorised person under section 245D may not be further disclosed except—

(a)to the person to whom the information relates; or

(b)in or in connection with proceedings on any such application to the court.

(3)A person who contravenes subsection (1) or (2) is guilty of an offence and liable to imprisonment or a fine, or both.

(4)It is a defence for a person charged with an offence under subsection (3) to prove—

(a)that he did not know, and had no reason to suspect, that the information had been disclosed under section 245D; or

(b)that he took all reasonable steps and exercised all due diligence to avoid the commission of the offence.

(5)Sections 732 (restriction on prosecutions), 733(2) and (3) (liability of individuals for corporate default) and 734 (criminal proceedings against unincorporated bodies) apply to offences under this section.

Modifications etc. (not altering text)

245FPower of authorised persons to require documents, information and explanationsE+W+S

(1)This section applies where it appears to a person who is authorised under section 245C of this Act that there is, or may be, a question whether the [F57 a company's annual accounts [F58or directors' report]] comply with the requirements of this Act [F59(or, where applicable, of Article 4 of the IAS Regulation)] .

(2)The authorised person may require any of the persons mentioned in subsection (3) to produce any document, or to provide him with any information or explanations, that he may reasonably require for the purpose of—

(a)discovering whether there are grounds for an application to the court under section 245B; or

(b)determining whether or not to make such an application.

(3)Those persons are—

(a)the company;

(b)any officer, employee, or auditor of the company;

(c)any persons who fell within paragraph (b) at a time to which the document or information required by the authorised person relates.

(4)If a person fails to comply with a requirement under subsection (2), the authorised person may apply to the court for an order under subsection (5).

(5)If on such an application the court decides that the person has failed to comply with the requirement under subsection (2), it may order the person to take such steps as it directs for securing that the documents are produced or the information or explanations are provided.

(6)A statement made by a person in response to a requirement under subsection (2) or an order under subsection (5) may not be used in evidence against him in any criminal proceedings.

(7)Nothing in this section compels any person to disclose documents or information in respect of which in an action in the High Court a claim to legal professional privilege, or in an action in the Court of Session a claim to confidentiality of communications, could be maintained.

(8)In this section “document” includes information recorded in any form.

Textual Amendments

Modifications etc. (not altering text)

245GRestrictions on further disclosure of information obtained under section 245FE+W+S

(1)This section applies to information (in whatever form) which—

(a)has been obtained in pursuance of a requirement or order under section 245F, and

(b)relates to the private affairs of an individual or to any particular business.

(2)No such information may, during the lifetime of that individual or so long as that business continues to be carried on, be disclosed without the consent of that individual or the person for the time being carrying on that business.

(3)Subsection (2) does not apply to any disclosure of information which—

(a)is made for the purpose of facilitating the carrying out by a person authorised under section 245C of his functions under section 245B;

(b)is made to a person specified in Part 1 of Schedule 7B;

(c)is of a description specified in Part 2 of that Schedule; or

(d)is made in accordance with Part 3 of that Schedule.

(4)The Secretary of State may by order amend Schedule 7B.

(5)An order under subsection (4) must not—

(a)amend Part 1 of Schedule 7B by specifying a person unless the person exercises functions of a public nature (whether or not he exercises any other function);

(b)amend Part 2 of Schedule 7B by adding or modifying a description of disclosure unless the purpose for which the disclosure is permitted is likely to facilitate the exercise of a function of a public nature;

(c)amend Part 3 of Schedule 7B so as to have the effect of permitting disclosures to be made to a body other than one that exercises functions of a public nature in a country or territory outside the United Kingdom.

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

(7)A person who discloses any information in contravention of this section—

(a)is guilty of an offence, and

(b)is liable on conviction to imprisonment or a fine, or both.

(8)However, it is a defence for a person charged with an offence under subsection (7) to prove—

(a)that he did not know, and had no reason to suspect, that the information had been disclosed under section 245F; or

(b)that he took all reasonable steps and exercised all due diligence to avoid the commission of the offence.

(9)Sections 732 (restriction on prosecutions), 733 (liability of individuals for corporate default) and 734 (criminal proceedings against unincorporated bodies) apply to offences under this section.

(10)This section does not prohibit the disclosure of information if the information is or has been available to the public from any other source.

(11)Nothing in this section authorises the making of a disclosure in contravention of the Data Protection Act 1998.

Modifications etc. (not altering text)