Withholding accounts
Discussion
You require the accounts (and any other information relating to the 'company') in order to discharge your legal duties as a director. My first port of call would be to informally.canvas the other directors to find out what the issue is. You also need to get familiar with the company articles of association and (if any) shareholder agreement.
You are all neighbours so it's important not to fall out (don't s
t where you live), however the flip side is that being a director is a formal obligation and you can be held personally responsible if anything untoward has been or is going on.
Follow the rules, have a clear and unambiguous paper trail and be prepared to resign if the other directors make it impossible for you to discharge your duties.
You are all neighbours so it's important not to fall out (don't s
t where you live), however the flip side is that being a director is a formal obligation and you can be held personally responsible if anything untoward has been or is going on. Follow the rules, have a clear and unambiguous paper trail and be prepared to resign if the other directors make it impossible for you to discharge your duties.
Just speak to them all plainly and openly. If there is an issue of any sort, bring it out in the open. It could be as simple as it being a ball ache to fish out the accounts or something emotional, like not wanting some upstart challenging the status quo. People are more often weird or slightly irrational than naughty.
As a company director you can, of course, ask for copies of the bank statements - so whether or not "the accounts have been done" you would get a clear idea of cash flow.
Although the accounts can hardly be complicated you can't reasonably expect them to be available in real time. On the other hand you would expect to see the accounts for the last completed financial year, whether or not they have yet been filed at Companies House.
Although the accounts can hardly be complicated you can't reasonably expect them to be available in real time. On the other hand you would expect to see the accounts for the last completed financial year, whether or not they have yet been filed at Companies House.
To complicate matters further, with recent accounting changes, the accounts should really be dormant (no trade) and only hold the shares/freehold if purchased. There should be a service charge statement each year which details the service charges received and costs incurred.
https://www.icaew.com/technical/financial-reportin...
https://www.icaew.com/technical/financial-reportin...
TonyRPH said:
My guess is, that requesting bank statements may well be met with the same 'brick wall' attitude.
Not from the bank it won't. You're a director of the company - ask the bank for statements if nobody else will give them to you....and you know who the bank is - just look at the sort code for when you pay your service charge.
As a director of a limited company, you are legally responsible for the actions of the company, including the preparation and submission of the company accounts. You are legally entitled to see the accounts. If you cannot obtain a set of the full statutory accounts from the other directors, contact the accountants directly and ask them.
I presume you know the name and address and other contact details of the accountants?
I presume you know the name and address and other contact details of the accountants?
I can't help with your specific situation, but I used to live in a flat that was one of 12 in a block. Shared Freehold, each flat had a 1/12 share in a limited company that owned the Freehold.
The company had a fair bit of cash in it - over £200K. It was a sinking fund for maintenance that had been kicked started with the sale price of 2 of the flats. People started to get suspicious that an external re-furb wasn't happening. It turns out the guy who controlled the money had spent it all on bailing out his own business. The other director was very trusting and she happily countersigned blank cheques.
Eventually the perpetrator sold his flat and paid the money back.
Really not a pleasant time - some people were really vicious and vindictive.
The company had a fair bit of cash in it - over £200K. It was a sinking fund for maintenance that had been kicked started with the sale price of 2 of the flats. People started to get suspicious that an external re-furb wasn't happening. It turns out the guy who controlled the money had spent it all on bailing out his own business. The other director was very trusting and she happily countersigned blank cheques.
Eventually the perpetrator sold his flat and paid the money back.
Really not a pleasant time - some people were really vicious and vindictive.
TonyRPH said:
Yes, one of the directors (who curiously surrendered his director status?) is indeed the accountant.
QBE? = Quick Books Expert?
The pdf summary he sent me a while back was generated by Google Chrome, so I presume he's accessing the accounts via a web browser.
QBE= Qualified By Experience.QBE? = Quick Books Expert?
The pdf summary he sent me a while back was generated by Google Chrome, so I presume he's accessing the accounts via a web browser.
TonyRPH said:
apart from the companies house page showing I am a director, there is no other evidence of me having anything to do with the company.
What better evidence could there be than the official record at Companies House?!All you need is some personal ID to convince the bank you really are the person on the official record.
As EricMC has said you can get accounts from the accountant, but only if he's done the accounts. Accounts tie up (eventually) with bank statements. On the other hand bank statements exist all the time - there's never an "eventually" unless someone's sitting on a pile of unpaid bills and/or unpresented cheques.
There is a statutory obligation for limited company accounts to be prepared in full in accordance with Companies Act requirements.
You, as a director of the company, have a legal right to see those full format company accounts. If you are being blocked from seeing these full accounts, I would advise you to demand, under threat of a legal summons, to see those full statutory accounts.
The accounts that will have been filed at Companies House will almost definitely have been submitted in Abridged Format which only gives a limited amount of information and is not adequate for a director to know or understand a set of accounts which he, as a director, IS LEGALLY RESPONSIBLE FOR.
You, as a director of the company, have a legal right to see those full format company accounts. If you are being blocked from seeing these full accounts, I would advise you to demand, under threat of a legal summons, to see those full statutory accounts.
The accounts that will have been filed at Companies House will almost definitely have been submitted in Abridged Format which only gives a limited amount of information and is not adequate for a director to know or understand a set of accounts which he, as a director, IS LEGALLY RESPONSIBLE FOR.
Eric Mc said:
rockin said:
What better evidence could there be than the official record at Companies House?!
If the accounts filed at Companies House are in Abridged Format, they will be of little use to a director.I agree with you that abridged accounts are, for practical purposes, useless. Especially if they're filed right at the end of the filing time window.
What specific information is the OP looking for from these accounts?
As a director of the company he is jointly liable for the information contained in the final accounts. If other directors are refusing him access to these full accounts - and, in fact, all the underlying records - they are breaking the law and putting the OP in a very precarious legal predicament.
As a director of the company he is jointly liable for the information contained in the final accounts. If other directors are refusing him access to these full accounts - and, in fact, all the underlying records - they are breaking the law and putting the OP in a very precarious legal predicament.
TonyRPH said:
Wow, there's a lot of info on that page.
Is it fair to assume that any competent accountant should be aware of the rules mentioned on the icaew.com site?
Some are still ignorant of the fact. Some management company accounts are still run through the limited company. No real harm, but not correct practice.Is it fair to assume that any competent accountant should be aware of the rules mentioned on the icaew.com site?
Eric Mc said:
If the accounts filed at Companies House are in Abridged Format, they will be of little use to a director.
Eric, the point that Rockin is making is that the OP can prove his director status via the Companies House records for the purposes of obtaining bank statements directly from the bank.If he is a formal director, then a search at Companies House will indeed show for sure whether he has been properly appointed as a director of the company.
Obtaining bank statements will be helpful but if I was him I would be far more concerned that accounts are being prepared and submitted which he has never seen or approved. That puts him in a very precarious legal situation.
Obtaining bank statements will be helpful but if I was him I would be far more concerned that accounts are being prepared and submitted which he has never seen or approved. That puts him in a very precarious legal situation.
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