To file or not to file?

To file or not to file?

Didn't find your answer?

Accounts are due to be filed by the end of the month. Company has had a very poor year and made a heavy loss, also share capital has been restructured, end result is negative shareholders funds of 130k!

My concern is that if we file the accounts with Co's House, we will open up a can of worms with creditors, credit limits etc.

The same thing happened last year when the companies equity was drastically reduced, although still remained positive.

The current years accounts are looking very good and should achieve a decent profit, capital will be invested into the company during the year and should result in a positive equity.

The company is able to repay creditors and cashflow is not currently a problem.

I just wondered if anyone had come across this situtation before and how they have dealt with it.

Thought that if maybe we didn't file the accounts with companies house until the current years accounts are complete then it could possibly save some of the hassle with creditors and may well be worth the £100 late filing penalty!

Any thoughts??
EM

Replies (12)

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By User deleted
10th Mar 2006 12:46

Update
I have contacted Companies house to enquire about changing the accounting date by one day, they said it was ok to do this.

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By mjswebster
09th Mar 2006 18:57

Old legislation

EM,

I think you are looking at an old version of the legislation there (the sections you have quoted seem to be from the 1989 amendment to the Companies Act 1985). However, it was amended again in 1996 (see http://www.opsi.gov.uk/si/si1996/Uksi_19960189_en_1.htm#tcon - paragrph 3)

The 1996 amendment removed subpargraph (2) from Section 225 altogether, and altered subpara (1) to refer to both the current and previous accounting reference period.

This version of the legislation therefore agrees with the Companies House guidance and the form 225.

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By User deleted
10th Mar 2006 08:26

Michael,
Thanks, I really appreciate your help.

It seems I was looking at an old version, is it just me or are the majority of .gov websites difficult to navigate!

I will submit the 225 and hopefully this will work as planned, no harm in trying!

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By User deleted
08th Mar 2006 13:53

Thanks Andy
thanks for the comments, maybe I should have also mentioned that we filed late last year! Would this have any effect on any action Co's House may take??

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By User deleted
08th Mar 2006 16:58

Negative equity
I would have thought that no results are better than bad results! One thing that may be worth considering is a change of year end. You haven't said when your year end is but if it is say 30 June and you know the current year is OK, you could shorten the current year to say 28 Feb or 31 March and file ASAP rather than having to wait until July/August. Your accountants may not like it but hopefully they can oblige and then your record at Companies house will be up to date sooner. It doesn't cost anything and is very simple to do. It is also quite easy to go back to previous year end in future years.

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By User deleted
08th Mar 2006 17:27

Thanks again!
Hadn't thought of that one Andy but will now, cheers!

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By mjswebster
08th Mar 2006 18:50

Does this work?

I've often wondered whether this apparent loophole works. I've never seen it mentioned anywhere, but looking at the legislation it appears to me that it might work, although I've never actually tried it. If there are any flaws in this, please let me know! If it does work, it may prove useful in extending the filing deadline of the 'problem' accounts and therefore delay these accounts hitting the records, but without the Companies House record showing they are overdue. You could then file a subsequent good set of results at the same time, as Andy had suggested.

Section 244(4) says that where an accounting reference date (ARD) has been shortened, the filing deadline is the later of the normal deadline (10 months from end of period etc) and 3 months from the date of the notice under S225 to shorten the ARD.

If the deadline is the end of this month, then I assume you are looking at a May 05 year-end. So towards the end of March 06 (it must arrive before the normal filing deadline expires), send in a 225 notice to shorten the ARD from say 31 May 2005 to 30 May 2005. The new filing deadline is the later of 30 March 2006 and 3 months from the date of the notice, ie towards the end of June. Therefore you've obtained almost a 3 month extension.

Even better, under Section 223(3) you can complete accounts for a period up to 7 days either side of the ARD, so you can carry on making accounts up to 31 May each year even though the ARD had been shortened to 30 May.

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By User deleted
09th Mar 2006 10:19

Legislation - possible loophole?
Thanks for your comments Michael.

I've looked into this and checked the legislation on the opsi.gov website, also on Companies House:

Section 225(1) "A company may by notice in the prescribed form given to the registrar specify a new accounting reference date having effect in relation to the company's current accounting reference period and subsequent periods"

And Section 225(2)Changes can be made to the previous ARP if the company is a subsidary or has an adminstration order.

Companies House guidance and form 225 states that the change can be made to the current or immeadiately previous accounting reference period - within the ten month deadline. Guidance also says there are no restrictions on shortening the ARP.

Going by what I have found in the Companies Act we wont be able to do this.

I know it's probably a bit of a grey area but can anyone give any further clarification on this or point me in the right direction?

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By AnonymousUser
09th Mar 2006 10:32

Form 225
Also read the legislation, I would try it anyway.

Form 225 only asks for the original ARP and the new ARP and states on it that you can change the current or immeadiately previous ARP.

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By Chris Smail
08th Mar 2006 16:03

Credit Insurance a problem?
If any of your suppliers use credit insurance they will very quickly be told not to trade with you. But if it did not affect you last year then they probably do not.

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By User deleted
08th Mar 2006 16:20

Problem either way?
Thanks Chris,

We did experience problems with suppliers using credit insurers last year. Suppliers significantly reduced limits causing short term cash flow problems. This is the main problem that I'm hoping to try and avoid!

We are a small company and work to tight budgets and often use suppliers with limits in the region of 10k over 60 - 90 day payment periods. Similarly our customers often don't pay us until 90 days or more (not within my control!!).

Re credit insurers what would cause the biggest problem, late filing or negative equity?

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By User deleted
08th Mar 2006 13:23

Agree completely
Whilst no doubt other respondents will quote the legal position and potential actions which could be taken against the directors etc., lets get real. If you are confident that the current years accounts show a better and of course more up to date picture then delay filing the bad result until current year is available. £100 possibly £250 may be well worth it as only the most recent accounts are going to be obtained by anyone performing a search. It is highly unlikely that any other consequences other than the late filing will arises, but try to get the up to date accounts done ASAP as anyone searching will see that accounts are late and this may cause some concern, though probably not as much as accounts showing a bad albeit out of date position

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