As you are no doubt aware all companies are required to prepare accounts and to file these with the Registrar of Companies. Currently, many smaller companies have the option of filing abbreviated accounts, although copies of the full financial statements must be sent to all shareholders and other entitled persons.
The requirement to send out full financial statements is relaxed for listed companies, who have been able to send out summary financial statements (SFS) where shareholders and others agree to receive these.
SFS contain the key information from the full accounts and include:
As you can imagine, SFS can drastically reduce the cost of printing and despatching full financial statements, given the relative size of many listed company reports and the numbers of those entitled to receive them!
The opportunity to save on these costs has now been extended to all companies. This is of course with the proviso that those entitled to receive the accounts agree. Full accounts must still be prepared, as SFS are only an option.
The change mainly benefits unlisted companies with complex financial statements or those with a wide share ownership. For example, AIM listed companies or large mutual companies. Here the cost of preparing SFS is likely to be more than offset by the cost saving in the printing and distribution of fewer copies of the full accounts.
Discussions with AIM have indicated that there could be cost savings of between £2,000 and £6,000 per company per year. However, if your company has few shareholders, the SFS option probably won’t be of much benefit.
If you believe that SFS could be better suited to your needs and would like to know more please get in touch.