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Abbreviated accounts possible?

Abbreviated accounts possible?

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I sort of lost a client last week - when I say lost he sold 100% of his business to a competitor as he was potentially going to go under as he had lost a major contract - we are in the midst of the handover

His company was small (£250k turnover) and his competitor is a PLC who is large/full disclosure.

The transaction happened on 30th June which is also my client's year end date. My client - who was retained and will run his former company as director but not shareholder has asked (as have the new owners) that I prepare the last accounts to 30th June and do all the necessary submissions etc and they will take over thereafter.

However.....as the new owners (XYZ PLC) took over on the last day of the year does that then mean that the company no longer qualifies as small and as such has to prepare full accounts and as the parent is audited they too should be audited ? 

As I see it - short of changing the companies House year end date to 29th June full accounts will be needed. OR and this is what we hope to be possible - can the ARD at Companies House stay at 30/06 BUT the accounts are prepared to 29th as you are allowed to draw them up to a date 7 days either side of the ARD. Or is that wishful thinking ?

If anyone has any advice I would be very grateful!

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By Duggimon
04th Jul 2016 14:09

I'm not sure if the full accounts will be required but your last idea won't work, the rules are dependant on the ARD, not the date you prepared them to.

You could change the ARD to 29 June and still prepare them to the 30th and that would likely remove any obligation but leaving it as the 30th and preparing them to the 29th won't make a bit of difference. Ideally the best move would be to use a time machine to go back and advise them to take over on 1 July.

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By bernard michael
04th Jul 2016 14:31

I suggest you liaise with the purchaser as it is also their accounts that are effected

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By TerryD
05th Jul 2016 17:02

I'm not convinced that using the 7 day rule won't work. Surely if the accounts are drawn up to 29 June (although in practice there might be an unadjusted error relating to trading on the 30th June!), and dated thus, then the company was not in a group relationship at its year end. Its "financial year" ends on 29 June (s.390(3)), so it is not excluded from audit exemption under s. 479 because it was not a group company during its financial year.

Either way, though, it would still be small for accounts preparation purposes.

However, as already mentioned, the new holding company might want an audit as these accounts will affect its consolidation (but might not be material?).

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