The Companies (Revision of Defective Accounts and Reports) Regulations 2008

EXPLANATORY NOTE

(This note is not part of the Regulations)

These Regulations set out how the provisions of the Companies Act 2006 (“the 2006 Act”) are to apply to revised annual accounts, directors’ reports, directors’ remuneration reports and summary financial statements prepared under section 454 of the 2006 Act. They replace the Companies (Revision of Defective Accounts and Report) Regulations 1990 (S.I. 1990/2570) (“the 1990 Regulations”) which were made under the Companies Act 1985 (c.6), and the Companies (Revision of Defective Accounts and Report) Regulations (Northern Ireland) 1991 (S.R. 1991/268) (“the 1991 Regulations”), made under the Companies (Northern Ireland) Order 1986 (S.I. 1986/1032 (N.I. 6)).

The Regulations come into force on 6th April 2008, and apply in relation to companies’ financial years beginning on or after that date (regulation 1(2)). They extend to the whole of the United Kingdom, reflecting the extent of the 2006 Act.

Regulation 2 contains definitions. Regulation 2(2) provides that any reference in the Regulations to members of a company include persons nominated to enjoy information rights under section 146 of the 2006 Act (traded companies: nomination of persons to enjoy information rights). Regulation 2(3) provides for references in the Regulations to 2006 Act provisions on the content of accounts and reports to include relevant provisions of the Small Companies and Groups (Accounts and Directors’ Report) Regulations 2008 and the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008. These two sets of regulations replace the Accounting Schedules to Part 7 of the Companies Act 1985 and Part 8 of the Companies (Northern Ireland) Order 1986.

Regulation 3 re-enacts the provisions of the 1990 and 1991 Regulations providing for revised accounts to be prepared as if they were being prepared as at the date of the approval of the original, defective accounts.

Regulations 4 to 6 re-enact the provisions setting out the procedures for the approval and signing of revised accounts, revised directors’ reports or revised directors’ remuneration reports, and require statements to be inserted into the revised documents making clear what they are.

Regulations 7 to 9 re-enact the provisions for a special auditor’s report on revised accounts or reports.

Regulation 10 restates the provisions that as from the date of revision of the revised accounts they are to be regarded as the company’s annual accounts for all the purposes of the 2006 Act (so that, for example, if the original defective accounts have not by that date been sent to the members of the company under section 423 of the 2006 Act, laid before the company in general meeting in the case of a public company under section 437 or delivered to the registrar of companies under section 441, the revised accounts must be so sent, laid or delivered). Regulation 11 makes similar provision with respect to directors’ reports and directors’ remuneration reports.

Regulations 12 to 14 re-enact the provisions requiring that the directors take certain steps with regard to revised accounts or revised reports where, prior to the date of the revision, copies of the original, defective accounts or reports have been sent to members, laid before the company in general meeting (in the case of a public company) or delivered to the registrar of companies. Regulations 15 to 17 re-enact the special provisions with respect to situations where, prior to the date of revision, accounts abbreviated as for a small or medium-sized company or summary financial statements have been delivered or sent based upon the original, defective accounts.

Regulation 18 re-enacts the provisions with respect to companies exempt from audit, while regulation 19 deals with the case where the provisions of the 2006 Act as to the contents of accounts or reports have changed between the date of the original, defective accounts and the date of revision.

Regulation 20 revokes the 1990 and 1991 Regulations, and makes transitional provision.

An Impact Assessment has not been produced for these Regulations as they have only a negligible impact on the costs of business, charities or voluntary bodies.