A limited company may buy back shares in itself, if certain conditions set out in the Companies Act 2006 (CA 2006) are met. This is known as a share buyback or a purchase of own shares. In addition to the provisions of CA 2006, there are other rules and guidelines that are relevant to a listed company or an AIM company. In particular, a listed company must have regard to the UK Listing Rules (UKLRs) and the Disclosure Guidance and Transparency Rules (DTRs). An AIM company must have regard to the AIM Rules for Companies (AIM Rules), but these do not specifically refer to share buybacks, so AIM Regulation has confirmed that compliance by an AIM company with the UKLRs in relation to share buybacks would represent best practice in most circumstances. An AIM company is also subject to DTR 5. In addition, both types of company may follow institutional investor guidance. The restrictions in CA 2006 relating to share buybacks do not apply to unlimited companies. For further information

This Practice Note outlines the provisions of the Companies Act 2006 (CA 2006) relating to the annual accounts of a company. CA 2006 sets out detailed provisions relating to the preparation of annual accounts and reports by a company. The Companies, Partnerships and Groups (Accounts and Reports) Regulations 2015, SI 2015/980 (2015 Regulations) implemented the requirements of the EU Accounting Directive (Directive 2013/34/EU) into UK law. The 2015 Regulations made a wide range of amendments to CA 2006, particularly in relation to the small companies regime. The 2015 Regulations, as amended by the Companies (Accounts and Reports) (Amendment and Transitional Provision) Regulations 2024 apply to financial periods beginning on or after 1 January 2016. This Practice Note, along with Practice Note: Accounts and reports—individual and group accounts, outlines the requirements set out in those statutory provisions. There are also additional rules relating to accounts and reports that apply to a listed company, an AIM company or a company with securities traded on one of AQSE’s markets, which are

In accordance with Part 15 of the Companies Act 2006 (CA 2006) all companies must produce accounts, but the statutory requirements to be met in relation to those accounts vary according to the status and size of the company in question in the relevant financial year. For the purpose of these statutory requirements, a number of different categorisations are used, each of which overlap to an extent. A company may be quoted or unquoted, and, if unquoted, may be a micro-entity, a small company or a medium-sized company. If a company is subject to the micro-entities regime or the small companies regime, the statutory requirements in relation its accounts are significantly less onerous than those that would otherwise apply (ie, those that simply apply to a larger unquoted company). The exemptions permitted by the medium-sized companies regime are now very limited. A company that is eligible for the micro, small or medium-sized company regime does not have to apply it; the requirements are optional. In practice, most small companies that are eligible to adopt the small companies

This glossary contains a summary and definition of some of the most common terms and phrases used in the context of a company’s accounting and reporting. A Word or phrase Definition Abbreviated accounts If the accounts of a small company (that is not a micro-entity) relate to financial years beginning before 1 January 2016 (see the Companies, Partnerships and Groups (Accounts and Reports) Regulations 2015 (SI 2015/980)), it may file abbreviated accounts at Companies House, rather than its full accounts.If the accounts of that same company relate to financial years beginning on or after 1 January 2016 it may file abridged accounts at Companies House if it chooses to do so and all the members of the company have consented to the abridgement. However, from 1 April 2028, companies, including micro-entities, will no longer be able to file abridged accounts.The required level of disclosure in abbreviated accounts is lower than the level required in full accounts. One of the key advantages of filing abbreviated accounts is that a small company may preserve some degree

STOP PRESS: The Economic Crime and Corporate Transparency Act 2023 (ECCTA 2023) received Royal Assent on 26 October 2023. It is intended to enhance corporate transparency in the UK, principally through Companies House reforms and amendments to provisions of the Companies Act 2006. It also seeks to modernise the regulatory framework for limited partnerships and create stronger powers to tackle economic crime. ECCTA 2023 is to come into force in stages. A number of its provisions came into force on 4 March 2024 and may impact this content. For further information, see Practice Notes: Implementation of the Economic Crime and Corporate Transparency Act 2023 and The Economic Crime and Corporate Transparency Act 2023—tracker, particularly the legislation and consultation tracker. This Practice Note focuses on the need for a company to produce individual accounts and for a parent company to prepare group accounts. The Companies Act 2006 (CA 2006) sets out detailed provisions relating to the preparation of annual accounts and reports by a company. The Companies, Partnerships and Groups (Accounts

On an accounts date deal for a share purchase, the buyer will determine the purchase price by reference to the previous set of audited accounts (and any other information available by means of due diligence) and there will be no mechanism for adjustment of the purchase price within the SPA (other than by means of warranty or covenant claims). A simple accounts date structure is now infrequently used because it provides no protection (other than specific protections under the tax covenant) for the buyer for the activities of the target company (or its group) after the accounts date.

1 Introduction This document sets out our finance and accounting systems and controls. Any person working in the firm’s Finance department must ensure they have read and understand the contents. There is a separate, shorter version of this document for use by fee earners and other, non-Finance staff. 2 Basic principles 2.1 We must safeguard money and assets entrusted to the firm by clients and others. 2.2 We must at all times comply with the SRA Accounts Rules (the Accounts Rules). Except where the Accounts rules provide otherwise, we must: 2.2.1 keep client money separate from the firm’s money; 2.2.2 keep client money safely in a bank or building society (in England and Wales) account identifiable as a client account of the firm; 2.2.3 withdraw client money from a client account only: (a) for the purpose for which the client money is being held; (b) following receipt of instructions; or (c) on the SRA’s prior written authorisation or in prescribed circumstances 2.2.4 account for a fair sum of interest on any client money the firm holds; 2.2.5 establish and maintain effective accounting arrangements, systems and internal controls; 2.2.6 keep accurate, contemporaneous and chronological records of our

1 Introduction 1.1 This accounts manual sets out our accounting systems and controls for fee earners and other non-finance staff. There is a separate, more detailed accounts manual for use by the Finance team. 1.2 The [Head of Finance OR COFA] is responsible for this manual. 2 Basic principles 2.1 We must safeguard money and assets entrusted to the firm by clients and others. 2.2 We must at all times comply with the SRA Accounts Rules (the Accounts rules). 2.3 Except where the Accounts Rules provide otherwise, we must: 2.3.1 keep client money separate from the firm’s money; 2.3.2 keep client money safely in a client bank account; 2.3.3 withdraw client money from a client account only as permitted by the Accounts Rules; 2.3.4 not provide banking facilities through a client account; and 2.3.5 pay a fair sum of interest on any client money the firm holds. 3 Accounts department 3.1 The Finance department is located at [insert location, eg office if you have more than one office or location within your office]. 3.2 The Finance department is led by [insert name and/or title][, who is also the firm’s Compliance Officer for Finance and Administration (COFA)]. 3.3 [Insert any other information regarding the structure of your accounts or finance department, eg if

The particular general meeting of the company at which its annual accounts and reports are (or are to be) laid in accordance with CA 2006, s 437, most typically its AGM. Public companies must send out copies of their annual accounts and reports no later than 21 days before the date of the relevant accounts meeting (CA 2006, s 424).

Amounts owed by an organisation or individual to another for goods or services it has received.

Amounts due to an organisation or individual from another for goods or services it has supplied.

Site accredited to hold government protectively marked materials