UK Law and Practice Contributed by: Gareth Sykes, James Palmer, Isobel Hoyle and Hannah Whitney, Herbert Smith Freehills Kramer
in a manner that would enable shareholders to evaluate that application and state whether they have complied with the provisions of the Gov - ernance Code, and if not, explain the reasons for this. The Governance Code also sets out certain information that should be included in the cor - porate governance statement contained in the annual report. This includes discussion of mat - ters such as board composition, the remunera - tion of directors and the relationship between a company and its auditor. Private companies over a certain size are required to include in their annual report a statement on the company’s governance arrangements. 6.3 Companies Registry Filings A company must notify Companies House (the registrar of companies) as and when there are any changes to its particulars, such as the reg - istered office, directors or changes in share capital. In addition, all special resolutions must be filed at Companies House within 15 days of being passed, and the Companies Act specifies certain ordinary resolutions that are also required to be filed at Companies House (eg, an ordinary resolution authorising directors to allot shares). All documents filed with Companies House are publicly available for free online. A company must also file certain information with Companies House, on an annual basis. This includes the annual report and accounts. The annual filing requirements also include a con - firmation statement confirming information in respect of its shareholders, directors and PSCs and confirming that the intended future activities of the company are lawful. The first confirma - tion statement filed after the identity verification requirements come into force will also need to
confirm that the company has complied with the identity verification requirements for exist - ing directors (see 4.1 Board Structure ). 7. Audit, Risk and Internal Controls 7.1 Appointment of External Auditors A company is required to appoint an external auditor when preparing its annual accounts unless it is subject to an exemption. Small and dormant companies are exempt from audit unless a sufficient number of members require an audit. For financial years beginning on or after 6 April 2025, a company will be classed as small if it is not exempt and meets two of the following three thresholds: • it must have an annual turnover of not more than GBP15 million; • it must have a balance sheet total of not more than GBP7.5 million; or • its average number of employees must be not more than 50. Directors are responsible for the preparation of the company accounts in accordance with all relevant law and regulations. Auditors report on whether the accounts meet the requirements as asserted by the directors, but this does not relieve the directors of their responsibilities. There are additional requirements that govern the relationship between companies which are “public interest entities” (that is, companies whose transferable securities are admitted to trading on a regulated market, insurers and credit institutions) and their auditors, such as the mandatory rotation of auditors after a maxi - mum of 20 years, the requirement to run a tender process of audit services and the auditor being
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