From 1 October 2012, subsidiary companies will no longer need to
have their annual accounts audited provided that, among other
things, their parent company agrees to guarantee all liabilities of
the subsidiary that are outstanding at the end of that financial
year. In addition, companies that qualify as "small" for
the purposes of preparing and filing accounts will automatically
qualify for exemption from audit. And dormant subsidiaries will not
even have to prepare and file accounts if, again, their parent
company agrees to guarantee all their outstanding liabilities and
certain other conditions are met. It will also be easier for
companies to switch between UK GAAP and IFRS when preparing their
accounts.
The relaxations will be introduced through amendments to the
Companies Act 2006 that will take effect on 1 October 2012 and
apply to financial years ending on or after that date. They are
part of the Government's stated commitment to reduce the
regulatory burden on UK businesses, and will be achieved partly by
taking advantage of certain options afforded to Member States under
the Fourth Company Law Directive (78/660/EEC) that the Government
has not previously taken up.
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This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq
Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.
The original publication date for this article was 28/0/2012.
