I am preparing company accounts. One material shareholder (50%) is now bankrupt. Disclosing he is bankrupt in the "Controlling Party" section in the notes to the accounts could be harmful for the company's business, as it is likely major customers and suppliers would want to do a company search, and not want to do business with the company if they see a bankrupt shareholder is involved. As I understand it, the shareholder could have his shares taken off him by the Official Receiver, or the Official Receiver could instruct this shareholder on how to vote. Any advice would be most appreciated.
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You haven't stated what standard you're preparing accounts under, do you *need* a controlling party note?
A question (I have no idea of the answer): if as stated in the OP someone can control how a 50% shareholder must vote, must that someone be disclosed as a PSC?
FRS102 para 33.5 requires disclosure of parent-subsidary relationships but there is no requirement to identify controlling shareholders within the financial statements.
I should have said "no requirement to disclose controlling shareholders *of stand-alone companies*"
The company's accounts are prepared under FRS 102. The company meets 2 out of the 3 criteria for being a micro-entity, and all 3 criteria for being a small company.
Full FRS 102 or FRS 102 Section 1A? Presumably the latter if all small company criteria met.
Can't see there is a need to disclose the controlling party (debateable anyway whether 50% shareholding makes someone "controlling")
Potentially more relevant is does the company rely on this shareholder for funding? If so does the company have going concern issues?