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UK Company Filing Requirements

Limited Companies

A limited company is an organisation that can be set up to run a business. It's responsible in its own right for everything it does and its finances are separate to its owner's personal finances. Any profit it makes is owned by the company, after it pays Corporation Tax. The company can then share its profits.

Ownership

Every limited company has 'members' - people or organisations who own shares in the company. Directors are responsible for running the company. Directors often own shares, but they don't have to.

Legal responsibilities

There are many legal responsibilities involved with being a director and running a limited company. Most limited companies are 'limited by shares'. This means that the shareholders' responsibilities for the company's financial liabilities are limited to the value of shares that they own but haven't paid for.

Example
A company limited by shares issues 100 shares valued at £1 each when it's set up. Its 2 shareholders own 50 shares each and have both paid in full for 25 of these. If the company goes bust, the maximum the shareholders have to pay towards its outstanding bills is £50 - the value of the remaining 25 shares that they've each not paid for. Company directors aren't personally responsible for debts the business can't pay if it goes wrong, as long as they haven't broken the law.

NB Some limited companies are required only to file 'abbreviated' accounts. In the UK filing regulations are determined by the size of the company, although some small companies still choose to file full accounts. These would be shown as 'Total Exemption Full' in a company's 'Accounts Type' listing. There are three variations on filing accounts and these impact on the amount of information available in a Credit Report. (See 'Who files what' below).

• Other types of company
  Most companies are private companies limited by shares. There are 3 other types.
  • Private company limited by guarantee
    Directors or shareholders financially back the organisation up to a specific amount if things go wrong.
  • Private unlimited companies
    Directors or shareholders are liable for all debts if things go wrong.
  • Public Limited Companies (PLC's)
    Companies where shares are traded publicly on a market, like the London Stock Exchange.
• Business Partnerships:
  (Accounting information not publicly available as filing not legally required).
  1. Ordinary Business Partnerships
     In a business partnership, the business partner (or partners) personally share responsibility for their business. They can share all your business' profits between the partners. Each partner pays tax on their share of the profits. Partnerships in Scotland (known as 'firms') are different, and have a 'legal personality' separate from the individual partners.
     • Legal responsibilities
       Partners are personally jointly and severally responsible for their share of:
       • any losses the business makes
       • bills for things they buy for the business, like stock or equipment
       • business debts
     A partner doesn't have to be an actual person. For example, a limited company counts as a 'legal person', and can also be a partner in a partnership
  2. Limited liability partnerships
     The partners in a limited liability partnership aren't personally liable for debts the business can't pay. Their liability is limited to the amount of money they invest in the business. Limited liability partnerships are most often set up by professional services firms, like solicitors or accountants.
  3. Limited partnerships
     The liability for debts that can't be paid by a limited partnership is unequally shared by its partners. This means:
     • 'General' partners can be personally liable for all the partnerships' debts.
     • 'Limited' partners are only liable up to the amount they initially invest in the business.

Unincorporated Associations

An 'unincorporated association' is an organisation set up through an agreement between a group of people who come together for a reason other than to make a profit, eg a voluntary group or a sports club. You don't need to register an unincorporated association, and it doesn't cost anything to set one up. This isn't a legal structure, so the association won't be recognised by the law. Individual members are personally responsible for any debts and contractual obligations.

Which companies file accounts?

Under the Companies Act, all Limited companies (incorporated businesses), trading or non-trading, must file accounts at Companies House annually. For each company you can purchase copies of the original Annual Accounts or a Credit Report which includes the past five years of accounts. The size of a company affects the level of accounting data filed. For example Small and Medium sized companies are not required to file Turnover. Limited Companies must file account:

• Within 21 months of the date of incorporation for private companies, or
• Within 18 months of the date of incorporation for public companies, or
• 3 months from the accounting reference date, whichever is longer.

The deadline for delivery to Companies House is calculated to the exact day. For example, a private company incorporated on 1 January 2013 with an accounting reference date of 31 January has until midnight on 1 October 2014 (21 months from the date of incorporation) to deliver its accounts, not 31 October.

Are there exemptions?

If they are eligible and wish to, medium-sized, small and dormant companies may prepare and file abbreviated accounts. Exemptions are not available to public companies, banking, insurance or shipping companies and any of their subsidiaries regardless of size.

What level of financial information is filed?

In the UK filing regulations are determined by the size of the company, although some small companies still choose to file full accounts. These would be shown as 'Total Exemption Full' in a company's 'Accounts Type' listing. There are three variations on filing accounts and these impact on the amount of information available in a Credit Report. Each company must deliver the following to Companies House:

What determines the size of a company?

For companies with financial years starting before 6 April 2008, the company must meet at least two of the following three criteria:

For companies with financial years starting on or after 6 April 2008, the company must meet at least two of the following three criteria:

Non-Limited

Sole Traders and Partnerships: (Accounting information not publicly available as filing of accounts is not legally required). Information available: address and public record information for CCJ's (County Court Judgments), confirmation of ownership, and usually provides a credit rating and risk guide.

A sole trader runs their own business as an individual. They can keep all their business' profits after they've paid tax on them.

Check their letterhead, business card, or compliment slip for their correct details. It can sometimes be difficult to find records for these businesses as they are individuals trading as a business and are not required to file any accounts for public viewing. A bank or other professional institution, if considering whether to offer a loan or credit to this type of entity would not only run a credit check on them but would also ask to see a copy of their "management accounts" which would contain similar information to those that are required to be filed by limited companies.

The owner or partners involved in a non-limited business or partnership are personally responsible/liable for:
• any losses their business makes
• bills for things they buy for their business, like stock or equipment
• keeping records of their business' sales and spending
• business debts

The non-limited business database currently holds approximately 2 million records. Our data provider has built a scorecard, which models business failure and uses the minimum amount of data available for each company. This ensures that the maximum numbers of businesses possible are awarded a credit limit.

Information used for rating non-limited entities includes:

• Length of time known by our data providers, which is used as proxy to estimate the age of the subject business.
• Post Code Events - this is the percentage of properties in a location with no CCJ's, which is an indicator of the strength of local economy where the business operates.
• Geographical region.
• Total value of CCJ's in last 24 months.
• Standard classification for the industry.
• Number of employees taken from information known to our data providers, which are used to estimate business size.