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Clarification on requirement for group accounts

Clarification on requirement for group accounts

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Greetings all. 

Grateful if somebody could confirm (or not) my thinking in the following situation.

My client A Ltd, a UK limited company, is 100% owned by Mr A.

Mr A has formed a new German company (B GmbH), 50% of the shares owned by A Ltd and the remaining 50% owned by Mr A.

My thinking is that as A Ltd does not own more than 50% of the shares of B GmbH, there is no parent/subsidiary relationship and therefore group accounts are not required. A Ltd and B GmbH are related and the relevant disclosures will need to be made in respect on intercompany trading and balances.

I'm just concerned that as Mr A owns 100% of A Ltd his shareshareholding in B GmbH also needs to be taken into account when deciding if B GmbH is a subsidiary of A Ltd.  I think not but I'd be grateful for confirmation.

Kindest regards...

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By Euan MacLennan
11th Jul 2012 11:07

No requirement for group accounts

Subsidiary and holding companies are defined in s.1159 CA 2006.  Unless the voting rights do not follow the shareholdings, B GmbH is not a subsidiary of A Ltd.

Even if it were, group accounts under s.399 CA 2006 would not be required if A Ltd qualified as small under s.383 CA 2006.

Thanks (1)
Replying to richardterhorst:
By JulietW
11th Jul 2012 13:33

Thanks Euan.

Thank you very much for this Euan.  It's most appreciated.



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