Accounts provided to minority shareholder ?

Accounts provided to minority shareholder ?

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do the full financial statements (including detailed P&L a/c not forming part of the statutory accounts) have to be provided to a minority shareholder of a private limited company ?
Paul Dorrington

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By David160
20th Jul 2006 00:02

The wider public
Giving infomation to shareholders often results in that infomation going to non shareholders, who may have an interest to see it; eg competitors and suppliers. Shareholders do not have the same duty of care that directors have, and if the directors give shareholders certain infomation, this may be in breech of that duty to consider the company as a whole.

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By AnonymousUser
29th Jun 2006 15:04

Make war, not peace.
See, now, that's exactly my point. Adversarily denying access to the >10% US shareholders just because you don't feel like it or it isn't madanted under UK law isn't going to make anybody any freinds. All it does is generates rifts that could eventually result in lawsuits that cost far more than printing a few reports does.

What you are required to do is very different than the extras one provides as part of shareholder services. One is legislated, the other is making compliance requests easy for your shareholders, which increases the value of the shares.

You can always charge a "user" fee for compiling extra information on their behalf. Typical user fees range anywhere from £5 to £5,000, depending on the complexitiy of the extra documentation involved and the number of shareholders over which the cost can be spread.

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David Winch
By David Winch
27th Jun 2006 20:57

Full statutory accounts

Paul

A shareholder is entitled to receive the full statutory accounts (not just the abbreviated ones sent to Companies House) but is not entitled to the detailed Profit and Loss Account, which (as you rightly say) does not form part of the statutory accounts and is simply an 'extra' provided for the information of the directors and HMR&C.

David

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By wdr
29th Jun 2006 10:23

What if minority shareholder is supplier/competitor

There seems to be a confusion here between accounts mandated by law to be created and sent to shareholders and other company information.

There are all sorts of reasons why a minority shareholder cannot/should not receive detailed accounts. What if none is prepared? What if the auditors ahve not considered them?

The Revenue, for example , cannot require a 'detailed' P&L to be prepared, even though if one is prepared it is conventional to send it to them.
In the case of banks, they typically want far more detailed informtion than the mere'detailed P&L' where there is significant debt involved.

Looking at the US for example, what is the position of a say 15% UK shareholder who has inheried shares in a US property investment company and who needs information under TCGA s.13?

Similarly US shareholders may have PFIC obligations and the UK directors do not have any obligation to supply the required information.

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By tomtrainer
30th Jun 2006 07:30

Detailed P+L
I am sure that, as the detailed P&L is not part of the statutory accounts, and not defined in statute, you cannot be statutorily obliged to provide it.

Whether or not you should is a different matter.

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By AnonymousUser
28th Jun 2006 07:38

Minority shareholder...
If the minority shareholder is a US citizen, s/he may be required to report the full profit & loss details on their US tax returns. Not providing this information to the minority shareholder could result in the minority shareholder facing fines of $10,000 for not reporting the information. Not providing this information is going to make for a mighty grumpy minority shareholder.

In short, before you decide not to provide the information, find out the reason why it is being requested.

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