When is a Group not a Group for accounting purposes?
XYZ Holdings Plc, an unquoted UK registered company. The company has over 200 "B" shareholders with no voting rights, who have subscribed around £4.7 million. The "A" shares, which carry voting rights, are owned by the founders who put in just £200.
The capital put into XYZ Holdings Plc is actually spent by a company called XYZ Ltd. Both companies share the same offices and the same directors. XYZ Holdings Plc owns 99.999% of XYZ Ltd in the form of "B" shares; the remaining 0.001% (just two "A" shares) are held by founders.
The Prospctus for XYZ Holdings Plc stated that the two companies would together form the "XYZ Group". However they file individual accounts, each with a different year-end date and have never submitted Group Accounts to Companies House. Having different year-end dates obviously makes the accounts less than transparent, added to which several years of accounts for both companies have never been submitted to Companies House and never shown to the shareholders. My understanding is that under the Companies Act a group of companies is required to file Group Accounts.
Their auditors tell me that the companies are "not a Group for accounting purposes". I would like to know whether a Group of companies like this can elect not to produce Group Accounts just because it suits them and which law allows them to do so.
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