Companies Act 2006, Cross Heading: Group accounts . is up to date with all changes known to be in force on or before 17 September 2024. There are changes that may be brought into force at a future date. Changes that have been made appear in the content and are referenced with annotations.
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Whole provisions yet to be inserted into this Act (including any effects on those provisions):
(2) If at the end of a financial year [ F3 a company ] is a parent company the directors, as well as preparing individual accounts for the year, must prepare group accounts for the year unless the company is exempt from that requirement.
[ F4 (2A) A company is exempt from the requirement to prepare group accounts if—
(a) at the end of the financial year, the company—
(i) is subject to the small companies regime, or
(ii) would be subject to the small companies regime but for being a public company, and
(b) is not a member of a group which, at any time during the financial year, has an undertaking falling within subsection (2B) as a member.
(2B) An undertaking falls within this subsection if—
(a) it is established under the law of [ F5 any part of the United Kingdom ] ,
(b) it has to prepare accounts in accordance with [ F6 the requirements of this Part of this Act, and ]
(i) is an undertaking whose transferable securities are admitted to trading on a UK regulated market,
(ii) is a credit institution within the meaning given by Article 4(1)(1) of Regulation (EU) No. 575/2013 of the European Parliament and of the Council, which is a CRR firm within the meaning of Article 4(1)(2A) of that Regulation, or
(iii) would be an insurance undertaking within the meaning given by Article 2(1) of Council Directive 91/674/EEC of the European Parliament and of the Council on the annual accounts of insurance undertakings were the United Kingdom a member State. ]
(3) There are [ F8 further ] exemptions under–
(4) A company F11 . which is exempt from the requirement to prepare group accounts, may do so. ]
Modifications etc. (not altering text)
C4 Ss. 380-414 applied (with modifications) (1.10.2009) by S.I. 2009/2436, regs. 3-5, Sch 1 para. 10 (with reg. 7, Sch. 2) (and the said Sch. 1 para. 10 is amended (with application in accordance with reg. 1(3) of the amending S.I.) by The Unregistered Companies (Amendment) Regulations 2013 (S.I. 2013/1972), regs. 1(2), 2(2)(a))
(1) A company is exempt from the requirement to prepare group accounts if it is itself a subsidiary undertaking and its immediate parent undertaking is established under the law of [ F13 any part of the United Kingdom ] , in the following cases—
(a) where the company is a wholly-owned subsidiary of that parent undertaking;
[ F14 (b) where that parent undertaking holds 90% or more of the allotted shares in the company and the remaining shareholders have approved the exemption;
(c) where that parent undertaking holds more than 50% (but less than 90%) of the allotted shares in the company and notice requesting the preparation of group accounts has not been served on the company by the shareholders holding in aggregate at least 5% of the allotted shares in the company.
Such notice must be served at least six months before the end of the financial year to which it relates. ]
(2) Exemption is conditional upon compliance with all of the following conditions—
(a) the company must be included in consolidated accounts for a larger group drawn up to the same date, or to an earlier date in the same financial year, by a parent undertaking established under the law of [ F15 any part of the United Kingdom ] ;
(b) those accounts must be drawn up and audited, and that parent undertaking's annual report must be drawn up F16. —
[ F17 (i) if the undertaking is a company, in accordance with the requirements of this Part of this Act, or, if the undertaking is not a company, the legal requirements which apply to the drawing up of consolidated accounts for that undertaking, or ]
(ii) in accordance with [ F18 UK-adopted international accounting standards ] ;
(c) the company must disclose in [ F19 the notes to ] its individual accounts that it is exempt from the obligation to prepare and deliver group accounts;
(d) the company must state in its individual accounts the name of the parent undertaking that draws up the group accounts referred to above and—
[ F20 (i) the address of the undertaking’s registered office F21 . or ]
(ii) if it is unincorporated, the address of its principal place of business;
(e) the company must deliver to the registrar, within the period for filing its accounts and reports for the financial year in question, copies of—
(i) those group accounts, and
(ii) the parent undertaking's annual report,
together with the auditor's report on them;
(f) any requirement of Part 35 of this Act as to the delivery to the registrar of a certified translation into English must be met in relation to any document comprised in the accounts and reports delivered in accordance with paragraph (e).
(3) For the purposes of subsection (1)(b) [ F22 and (c) ] shares held by a wholly-owned subsidiary of the parent undertaking, or held on behalf of the parent undertaking or a wholly-owned subsidiary, shall be attributed to the parent undertaking.
(4) The exemption does not apply to a company [ F23 which is a traded company. ]
(5) Shares held by directors of a company for the purpose of complying with any share qualification requirement shall be disregarded in determining for the purposes of this section whether the company is a wholly-owned subsidiary.
Modifications etc. (not altering text)
C4 Ss. 380-414 applied (with modifications) (1.10.2009) by S.I. 2009/2436, regs. 3-5, Sch 1 para. 10 (with reg. 7, Sch. 2) (and the said Sch. 1 para. 10 is amended (with application in accordance with reg. 1(3) of the amending S.I.) by The Unregistered Companies (Amendment) Regulations 2013 (S.I. 2013/1972), regs. 1(2), 2(2)(a))
(1) A company is exempt from the requirement to prepare group accounts if it is itself a subsidiary undertaking and its parent undertaking is not established under the law of [ F26 any part of the United Kingdom ] , in the following cases—
(a) where the company is a wholly-owned subsidiary of that parent undertaking;
[ F27 (b) where that parent undertaking holds 90% or more of the allotted shares in the company and the remaining shareholders have approved the exemption; or
(c) where that parent undertaking holds more than 50% (but less than 90%) of the allotted shares in the company and notice requesting the preparation of group accounts has not been served on the company by the shareholders holding in aggregate at least 5% of the allotted shares in the company.
Such notice must be served at least six months before the end of the financial year to which it relates. ]
(2) Exemption is conditional upon compliance with all of the following conditions—
(a) the company and all of its subsidiary undertakings must be included in consolidated accounts for a larger group drawn up to the same date, or to an earlier date in the same financial year, by a parent undertaking;
[ F28 (b) those accounts and, where appropriate, the group’s annual report, must be drawn up—
(ii) in a manner equivalent to consolidated accounts and consolidated reports [ F30 drawn up in accordance with the requirements of this Part of this Act ] ,
(iii) in accordance with [ F31 UK-adopted international accounting standards ] , or
(iv) in accordance with accounting standards which are equivalent to such international accounting standards, as determined pursuant to Commission Regulation (EC) No. 1569/2007 of 21 December 2007 establishing a mechanism for the determination of equivalence of accounting standards applied by third country issuers of securities pursuant to Directives 2003/71/ EC and 2004/109/ EC of the European Parliament and of the Council; ]
(c) the group accounts must be audited by one or more persons authorised to audit accounts under the law under which the parent undertaking which draws them up is established;
(d) the company must disclose in its individual accounts that it is exempt from the obligation to prepare and deliver group accounts;
(e) the company must state in its individual accounts the name of the parent undertaking which draws up the group accounts referred to above and—
[ F32 (i) the address of the undertaking’s registered office (whether in or outside the United Kingdom), or; ]
(ii) if it is unincorporated, the address of its principal place of business;
(f) the company must deliver to the registrar, within the period for filing its accounts and reports for the financial year in question, copies of—
(i) the group accounts, and
(ii) where appropriate, the consolidated annual report,
together with the auditor's report on them;
(g) any requirement of Part 35 of this Act as to the delivery to the registrar of a certified translation into English must be met in relation to any document comprised in the accounts and reports delivered in accordance with paragraph (f).
(3) For the purposes of subsection (1)(b) [ F33 and (c) ] , shares held by a wholly-owned subsidiary of the parent undertaking, or held on behalf of the parent undertaking or a wholly-owned subsidiary, are attributed to the parent undertaking.
(4) The exemption does not apply to a company [ F34 which is a traded company ] .
(5) Shares held by directors of a company for the purpose of complying with any share qualification requirement shall be disregarded in determining for the purposes of this section whether the company is a wholly-owned subsidiary.