Our UK Corporate Secretarial expert outlines accounting regulation changes implemented on 6 April 2015, that affect how disclosure of subsidiary entities are dealt with.
Section 409 of the Companies Act 2006 (CA 2006) requires all companies to disclose information related to undertakings such as:
- general information about subsidiary undertakings
- holdings in subsidiary undertakings
- financial information about subsidiary undertakings
- shares of company held by subsidiary undertakings
- significant holdings in other undertakings
- membership of certain undertakings
- the parent undertaking and ultimate parent company.
Prior to 1 July 2015 a parent company had the option to show a full list of its subsidiaries in its annual report, or to take advantage of section 410 of the CA 2006, which allowed parent companies to provide more limited information on undertakings in the notes to the annual report (where there are numerous related undertakings and the directors believed that full disclosure would result in information of excessive length), and permitted full information on the related undertakings to be submitted with the next annual return.
Pursuant to The Companies, Partnerships and Groups (Accounts and Reports) Regulations 2015, for accounts signed on or after 1 July 2015, this option will be removed and the full list of subsidiaries will be required to be produced in the annual report.
Action: Ensure that the full list of subsidiaries are disclosed in the annual reports approved on or after 1 July 2015.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.