Following your company incorporation, there are a number of obligations and filings to Companies House that you are required to complete. Many of these do not occur immediately following formation, but action may be needed from an early stage in your company’s life.
The company records are used in the preparation of the annual accounts, a compulsory filing responsibility for all limited companies. As a legal requirement, it is important that these accounts are filed accurately to represent the company’s position. This highlights the vital importance of precise record-keeping on a regular basis.
The basic record-keeping obligation for companies is to document their day-to-day transactions. Even in the event that company is dormant, meaning not trading, they are still required to keep these transactions. This includes expenditure relating to incorporation, for example money from the transactions of shareholders from the beginning. The records produced must be enough to show a “true and fair view” of the company’s financial position. This allows the annual accounts to be compiled with the accuracy that is in order with legal requirements.
Although there is a necessity to keep financial records, the nature of these is not specified in the guidelines. Simply, a company is required to record all day-to-day expenditure and receipts of trading. In addition, they must document all of their assets and liabilities, including stock at the end of the year if the company deals in goods. When dealing in goods, it is also vital to detail information about the buyers and sellers.
Financial records must be kept at the company’s registered office address, or another address that has been agreed as suitable by the directors. The documents for a limited company must be retained for at least three years, according to the Companies Act 2006. However, it is possible that records should be kept for a longer period than this for corporation tax purposes.
The accounting records must be available for inspection by the company’s officers at any time. However, a common mistake is the belief that this is also the case for shareholders, who do not have an entitlement to inspect the records.
It is a criminal offence for which the directors are responsible if a company does not keep sufficient accounting records. This includes not keeping the records in the correct, agreed place.
If you have any questions about your duties following your online company formation, please feel free to contact our customer support team on 0844 893 0808.
