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Responsibilities of Running a Company

May 11, 2016

Advice on running a Limited Company from Optimise Accountants

Are you unsure of what your ongoing responsibilities as a company owner are?

The problem — so many things to do and not enough time

Running a business can take up so much of your time. It is easy to forget the annual responsibilities of running a limited company.

There are two main things you need to do each year:

  1. Annual returns
  2. Preparing and filing annual accounts

Annual returns

An annual return is a snapshot of general information about a company’s directors, secretary (where one has been appointed), registered office address, shareholders and share capital.

Every company must deliver an annual return to Companies House at least once every 12 months. The company’s director(s) and the secretary (where applicable), are responsible for ensuring they deliver the annual return to Companies House within 28 days of the anniversary of incorporation of a company or of the anniversary of the made-up date (the date to which the annual return is made up) of the last annual return.

If you do not deliver the company’s annual return, the Registrar might assume the company is no longer carrying on business or in operation and take steps to strike it from the register.

An annual return must contain the following information:

  •   the name of the company
  •   its registered number
  •   the date to which the annual return is made-up (the made-up date)
  •   the principal business activities of the company
  •   the type of company it is, for example, private or public
  •   the registered office address of the company
  •   the address (single alternate inspection location — SAIL) where the company keeps certain company records if not at the registered office, and details of records held there
  •   the details of the company secretary (corporate or individual), where applicable
  •   the details of all the company’s directors (corporate or individual)

Companies House will send a letter to your company’s registered office to remind you when your annual return is due. It advises how to file the form electronically by using its Software Filing or WebFiling services, which is the easiest and cheapest option.

However, if you do not have the facility to file online you can download a blank Form AR01 of the annual return from its website or order a blank paper copy form by calling 0303 1234 500.

Preparing and filing annual accounts

Accounting records must, in particular, contain:

  •   entries showing all money received and expended by the company
  •   a record of the assets and liabilities of the company

In addition, where the company’s business involves dealing in goods, the records must contain:

  •   statements of stock held by the company at the end of each financial year
  •   all statements of stock takings from which it has taken or prepared any statements of stock
  •   statement of all goods sold and purchased, other than by ordinary retail trade. This should list the goods, the buyers and sellers

Private companies must keep accounting records for three years from the date they were made. Public companies must keep them for six years. Generally, accounts must include:

  •   a profit and loss account (or income and expenditure account if the company is not trading for profit)
  •   a balance sheet signed by a director on behalf of the board and the printed name of that director
  •   notes to the accounts

There is no longer a statutory requirement for private companies to lay their accounts before members at a general meeting. If a private company’s articles currently specify that the company must lay accounts before members at a general meeting, it must pass a special resolution to remove that provision.

A public company must lay its accounts before its members at an annual general meeting.

Failure to deliver accounts on time is a criminal offence. In addition, the law imposes a civil penalty for late filing of accounts on the company. The amount of the penalty depends on how late the accounts arrive and whether the company is private or public at the date of the balance sheet.

Next steps — running a limited company 

If you want to understand how to implement this strategy or to discuss other finance/tax questions then please book some time with us using the below calendar
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Telephone: 0115 939 4606
Email: simon@optimiseaccountants.co.uk