What obligations does a company have to maintain accounting records?
A company must keep accounting records which are sufficient to show and explain its transactions. Furthermore, unless it is dormant or able to take advantage of the audit exemption, it must prepare and file with Companies House audited accounts for each financial year. If the company qualifies as either a “small” or “medium” sized company within the meaning of the Companies Act it need only file abbreviated accounts. Qualification as a small or medium sized company is based on the amount of annual turnover, gross assets and number of employees. There are some exemptions from the requirement to prepare audited accounts but these are subject to certain conditions (including the fact that the company concerned is not a subsidiary of another company).
