Tag Archives: Company Accounts

Top 5 Reasons Why Company Accounts are Rejected

Company Annual Accounts rejectedCompanies House have released figures showing that they now reject 11.1% of company accounts. Using the Companies House statistics for July 2012 that means over 300,000 companies have had their accounts rejected so far this year. If acceptable accounts are not received on time then Companies House will automatically levy late filing penalties. This could, therefore, be a costly process for these companies.

Companies House have now published the most common reasons why they reject company annual accounts. The top 5 are:

1)      Incorrect Statements to the Accounts – All company accounts have to have the correct wording on them. The exact wording depends on the age of the company and its size. If the wording is not correct the accounts can be rejected. 33,349 companies got their statements wrong last year.

2)      Duplicate Made up Date – The ‘made up date’ is the end of the accounting period that the annual accounts cover. This is normally the anniversary of when the company was formed. 17,329 companies had their accounts rejected for duplicating this date. This normally happens because they have re-used the previous year’s accounts and have forgotten to change the date.

3)      Signatory Name Missing off Balance Sheet – A company director has to sign the company balance sheet before the accounts are submitted. 12,106 companies forgot to do this.

4)      Audit exemptions statements missing or incorrect – Under the 2006 companies act small businesses can claim exemption from having their accounts audited. 10,277 companies failed to get the wording of their exemption correct or missed it entirely.

5)      Made up Date Missing or Incorrect – Whereas 17,329 companies managed to duplicate the made up date on their accounts, 10,026 companies managed to either miss it off all together or get it wrong.

Filing of company accounts is required for all limited companies whether they are trading or not. This has to be done every year and can be a considerable strain on resources for small businesses. Getting these accounts wrong and having to do them again is the last thing you need, especially as it opens you up to late filing penalties and a criminal prosecution.

Whilst the company directors are ultimately responsible for filing the accounts correctly you can offset some of the risk by getting a qualified accountant to create the accounts for you. An experienced accountant should be able to avoid the most common mistakes listed above and, if they don’t, should absorb any fines.

The Company Warehouse offer a range of accounting services including the preparation and filing of annual accounts starting from £14.99 per month.

Anger At Companies House Late Filing Penalties

Companies-House-penaltiesAccording to some reports, Companies House have received just over 1,700 complaints and appeals from limited companies hit by late filing penalties. Due to the recent heavy snowfall and problems with Royal Mail deliveries, company accounts and annual returns failed to reach Companies House by the December 31st deadline. As a result many companies found themselves hit with an unexpected fine of £150 or more.

Fulfilling Company Legal Obligations

Registering as a limited company there are a number of legal obligations and accountancy requirements which you are expected to comply with. Failure to meet your obligations could lead to financial penalties and in more serious situations a company may even be struck from the register.

It is important that you keep on top of your legal obligations and submit your accounts on time. Companies House has openly dismissed company pleas that the delay was caused by the extreme weather conditions. In fact they have stated:

“Disruption by bad weather may well be an exceptional circumstance for some companies, but the disruption to the postal services was not uniform across Britain and the majority of companies managed to get their accounts delivered on time, despite the weather […] If a company has received a penalty, we provide guidance on our website on the appeals process.”

Interestingly, FreelanceUK comment on how Companies House accounts show that they generated revenue of £85 million last year from late payment fines.

Supporting You

If you need support to keep on top of your accounts and ensure they get delivered on time, our accountancy services are ideal. Cut down on the potential headaches and keep costs down with our fixed-fee and start-up accountancy services.

Ease your dealings with Companies House by contacting us today! Ring 0800 0828727 and ask for accountancy support or contact our accountancy partners Pinnacle Accountancy directly on 0845 880 2557.

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Company Compliance – Avoiding Government fines

company accountsEvery company and limited liability partnership, big or small, old or new, trading or dormant, is required by Section 441 of the Companies Act 2006 to submit company accounts and reports every year to Companies House. Whether you’re about to start a new company or a business that has already been operating for a while, it’s essential that you know what is required of you, getting it wrong can have serious consequences.

A company that fails to file its annual return or accounts risks being struck from the company register. Directors of that company will also likely face a fine, disqualification or criminal record for failing to carry out their legal duty.

What is an Annual Return?

An annual return is quite simply a snapshot of the company. It must be sent to Companies House every 12 months within 28 days of the anniversary of incorporation (company formation) or date of last annual return. The annual return must contain detailed information on:

  • Company officers (directors),
  • Shareholders,
  • Registered office; and
  • Share capital.

What are Company Accounts?

Every company must keep accounts. Even if they aren’t trading they are still required by law to keep the correct accounts. Company accounts should include things such as:

  • Directors report,
  • Auditors report,
  • Balance sheet,
  • Profit and loss statements; and
  • More.

A dormant company must file accounts that reflect the share structure and non-trading companies may keep a record of income and expenditure in place of a profit and loss statement, but whatever the case may be, the law still requires prompt and correct submission. A company’s first accounts must be submitted within 21 months of incorporation for a private company or LLP, 18 months for a public company. The following annual accounts must be filed 9 months after the accounting reference date for a private company or LLP or 6 months for a public company. Failure to do so can result in hefty fines, as you can see from the table below. These penalties may be doubled where a company is late in filing its accounts late for two (or more) consecutive years. The importance of correct and prompt filing is clear.

Length of delay Private company Public Company
Not more than 1 month £150 £750
More than 1 month but not more than 3 months £375 £1,500
More than 3 months but not more than 6 months £750 £3,000
More than 6 months £1,500 £7,500

Here at The Company Warehouse, we’ve teamed up with Pinnacle Accountancy Limited to offer a company accountancy service to help fulfil your needs and avoid potentially nasty fines. Contact us today for more information on 0800 0828 727.

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Accounting Requirements – Legal Obligations and Criminal Offences

company accountsRunning a growing business can involve a lot of hard work. Not least of which is the maintenance of the company accounts. Not everyone is great with figures, similarly not everyone realises their legal obligations.

Section 386 of the Companies Act 2006 lays down the duty of every company to keep proper accounts, stating:

“(1) Every company must keep adequate accounting records…

…(3) Accounting records must, in particular, contain—

(a) entries from day to day of all sums of money received and expended by the company and the matters in respect of which the receipt and expenditure takes place, and

(b) a record of the assets and liabilities of the company. “

Section 387 makes it clear that failure to comply with this regulation is a criminal offence which is punishable with imprisonment.

“(1) If a company fails to comply with any provision of section 386 (duty to keep accounting records), an offence is committed by every officer of the company who is in default…

(3) A person guilty of an offence under this section is liable—

(a) on conviction on indictment, to imprisonment for a term not exceeding two years or a fine (or both);

The essence of this area of law is that every director of a company is responsible for the company’s accounts. Failure to comply with the law and fulfil this duty can have serious consequences for individual directors. It is therefore important to keep proper accounts, maintaining the books on a daily basis. The act also furthers this duty by requiring these accounts to be kept for a number of years.

Section 388(4):

(4) Accounting records that a company is required by section 386 to keep must be preserved by it—

(a) in the case of a private company, for three years from the date on which they are made;

(b) in the case of a public company, for six years from the date on which they are made.

Once again failure to comply is a criminal offence (also punishable by up to 2 years imprisonment). These are just a few of the legal obligations placed on company directors with regards to accounts and bookkeeping. Most of them can be complied with quite simply. Use of good accounting software can help ease the burden of maintaining the company books.

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