Section 399: Duty to prepare group accounts, Companies Act 2006

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If at the end of a financial year a company is a parent company the directors, as well as preparing individual accounts for the year, must prepare group accounts for the year unless the company is exempt from that requirement.

A company is exempt from the requirement to prepare group accounts if—

at the end of the financial year, the company—

is subject to the small companies regime, or

would be subject to the small companies regime but for being a public company, and

is not a member of a group which, at any time during the financial year, has an undertaking falling within subsection (2B) as a member.

An undertaking falls within this subsection if—

it is established under the law of any part of the United Kingdom,

it has to prepare accounts in accordance with the requirements of this Part of this Act, and

it—

is an undertaking whose transferable securities are admitted to trading on a UK regulated market,

is a credit institution within the meaning given by Article 4(1)(1) of Regulation (EU) No. 575/2013 of the European Parliament and of the Council, which is a CRR firm within the meaning of Article 4(1)(2A) of that Regulation, or

would be an insurance undertaking within the meaning given by Article 2(1) of Council Directive 91/674/EEC of the European Parliament and of the Council on the annual accounts of insurance undertakings were the United Kingdom a member State.

There are further exemptions under–

section 400 (company included in UK accounts of larger group),
section 401 (company included in non-UK accounts of larger group), and
section 402 (company none of whose subsidiary undertakings need be included in the consolidation).

A company ... which is exempt from the requirement to prepare group accounts, may do so.

Section 399: Duty to prepare group accounts

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