Companies Act 1981
| Jurisdiction | UK Non-devolved |
| Citation | 1981 c. 62 |
Companies Act 1981
1981 CHAPTER 62
An Act to amend the law relating to companies and business names.
[30th October 1981]
Be it enacted by the Queen's most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—
Part I
Company Accounting and Disclosure
General provisions with respect to the form and content of accounts
1 General provisions with respect to the form and content of accounts.
(1) Section 149 of the 1948 Act shall be renumbered section 149A and the following section shall be inserted in that Act as section 149—
149 ‘General provisions with respect to the form and content of accounts.
(1) The accounts of a company prepared under section 1 of the Companies Act 1976 shall comply with the requirements of Schedule 8 to this Act (so far as applicable) with respect to the form and content of the balance sheet and profit and loss account and any additional information to be provided by way of notes to the accounts.
(2) Every balance sheet of a company so prepared shall give a true and fair view of the state of affairs of the company as at the end of its financial year, and every profit and loss account of a company so prepared shall give a true and fair view of the profit or loss of the company for the financial year.
(3) Subsection (2) above overrides the requirements of Schedule 8 to this Act and all other requirements of the Companies Acts 1948 to 1981 as to the matters to be included in a company's accounts or in notes to those accounts; and accordingly—
(a ) if a balance sheet or profit and loss account of a company drawn up in accordance with those requirements would not provide sufficient information to comply with that subsection, any necessary additional information must be provided in that balance sheet or profit and loss account or in a note to the accounts; and
(b ) if, owing to special circumstances in the case of any company, compliance with any such requirement in relation to any balance sheet or profit and loss account of the company would prevent that balance sheet or profit and loss account from complying with that subsection (even if additional information were provided in accordance with paragraph (a ) above) the directors of that company shall depart from that requirement in preparing that balance sheet or profit and loss account (so far as necessary in order to comply with that subsection).
(4) Where the directors of any company depart from any such requirement in relation to the accounts of the company, particulars of that departure, the reasons for it and its effect shall be given in a note to the accounts.
(5) This section, with the exception of subsections (6) and (8), shall not apply to any group accounts prepared by a company under section 1 of the Companies Act 1976 (taken with section 150 of this Act); and, subject to subsection (6) below, subsections (1) and (2) above shall not apply to a company's profit and loss account (or require the notes otherwise required in relation to that account) if—
(a ) the company has subsidiaries; and
(b ) the profit and loss account is framed as a consolidated profit and loss account dealing with all or any of the company's subsidiaries as well as the company and—
(i) complies with the requirements of this Act relating to consolidated profit and loss accounts; and
(ii) shows how much of the consolidated profit or loss for the financial year is dealt with in the accounts of the company.
(6) Where in the case of any company advantage is taken of subsection (5) above that fact shall be disclosed in a note to the group accounts.
(7) If any accounts of a company of which a copy is laid before the company in general meeting or delivered to the registrar of companies do not comply with the requirements of this section and with the other requirements of the Companies Acts 1948 to 1981 as to the matters to be included in or in a note to those accounts, every person who, at the time when the copy is so laid or delivered, is a director of the company shall be guilty of an offence and, in respect of each such offence, shall be liable—
(a ) on conviction on indictment, to a fine;
(b ) on summary conviction, to a fine not exceeding the statutory maximum;
but in any proceedings against a person for an offence under this section it shall be a defence for him to prove that he took all reasonable steps for securing compliance with the requirements in question.
(8) For the purposes of this Act, except where the context otherwise requires—
(a ) any reference to a balance sheet or profit and loss account shall include any notes to the accounts in question giving information which is required by any provision of the Companies Acts 1948 to 1981 and required or allowed by any such provision to be given in a note to a company's account; and
(b ) any reference to a profit and loss account shall be taken, in the case of a company not trading for profit, as referring to its income and expenditure account, and references to profit or to loss, and if the company has subsidiaries, references to a consolidated profit and loss account shall be construed accordingly.’
(2) Schedule 8 to the 1948 Act shall be renumbered as Schedule 8A and the Schedule set out as Schedule 1 to this Act shall be inserted in the 1948 Act as Schedule 8.
2 Group accounts.
2. Section 152 of the 1948 Act shall be renumbered as section 152A and the following section shall be inserted in that Act as section 152—
152 ‘Group accounts.
(1) Subject to the following provisions of this section, the group accounts prepared by a holding company under section 1 of the Companies Act 1976 (taken with section 150 of this Act) shall comply with the requirements of Schedule 8 to this Act (so far as applicable to group accounts in the form in which those accounts are prepared) with respect to the form and content of those accounts and any additional information to be provided by way of notes to those accounts.
(2) Those accounts (together with any notes to those accounts) shall give a true and fair view of the state of affairs and profit or loss of the company and the subsidiaries dealt with by those accounts as a whole, so far as concerns members of the company.
(3) Subsection (2) above overrides the requirements of Schedule 8 to this Act and all other requirements of the Companies Acts 1948 to 1981 as to the matters to be included in or in a note to group accounts prepared by a holding company; and accordingly paragraphs (a ) and (b and subsection (4) of section 149 of this Act shall apply in relation to the true and fair view required by subsection (2) above, with the substitution of references to the group accounts for references to the balance sheet or profit and loss account or the accounts of the company.
(4) Where the financial year of a subsidiary does not coincide with that of the holding company, the group accounts shall, unless the Secretary of State on the application or with the consent of the holding company's directors otherwise directs, deal with the subsidiary's state of affairs as at the end of its financial year ending with or last before that of the holding company and with the subsidiary's profit or loss for that financial year.
(5) The Secretary of State may, on the application or with the consent of a company's directors, modify the requirements of Schedule 8 to this Act as they have effect in relation to that company by virtue of subsection (1) above for the purpose of adapting them to the circumstances of the company; and references above in this section to the requirements of that Schedule shall be read in relation to that company as references to those requirements as so modified.’.
Notes to the accounts
3 Extension of requirements of section 4 of the 1967 Act.
(1) In section 4 of the 1967 Act (which requires a company to state in its accounts the identities, etc., of bodies corporate, not being subsidiaries, in which it holds shares representing a certain proportion of the equity share capital of those bodies corporate or, as the case may be, of its own assets) the following subsection shall be inserted after subsection (1)—
(1A) Subject to the provisions of this section, if, at the end of its financial year, a company holds shares comprised in the share capital of another body corporate (not being its subsidiary) exceeding in nominal value one-tenth of the allotted share capital of that body, there shall be stated in a note to the accounts of the company prepared under section 1 of the Companies Act 1976—
(a ) the name of that other body corporate and—
(i) if it be incorporated in Great Britain and if it be registered in England and the company be registered in Scotland (or vice versa), the country in which it is registered; and
(ii) if it be incorporated outside Great Britain, the country in which it is incorporated;
and
(b ) the identity of each class of such shares held and the proportion of the nominal value of the allotted shares of that class represented by the shares of that class held by the company.’.
(2) The following amendments shall be made in section 4 in consequence of subsection (1) above—
(a ) in subsection (3), for the words ‘Neither of the foregoing subsections’ there shall be substituted the words ‘None of the foregoing provisions of this section’;
(b ) in subsection (4)—
(i) after the words ‘subsection (1)’ there shall be...
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