What is the difference between a Confirmation Statement and an Annual Account?
Posted on 8th October 2024 at 10:45
In this Creditforum blog, you will be coming across two documents which might seem similar, and any Lehman can use those words interchangeably. But both serve fairly distinct purposes.
The documents are Confirmation Statement and Annual Accounts.
Lets take a deep dive into them one by one and understand the differences and why both of them are necessary.
Confirmation Statement-
The confirmation statement (Companies House form CS01) is used to ensure that vital company data registered at Companies House is still true on a specific date.
If any details on file are wrong or are outdated when the confirmation statement is due, the business should provide the correct information prior to or with the statement's delivery.
Contents of Confirmation Statement-
• Site of the company's statutory registries.
• Names of all shareholders
• Statement of Capital
• Main business operations.
• Shares held by all shareholders
• The business's total number of shares and their aggregate nominal value.
• The total unpaid amount on the shares, if any.
Furthermore, you must present the following for each class of shares:
• Prearranged details of the rights linked with the shares.
• The total number of shares in the class and their trade standing.
• Individuals with considerable control, or PSCs
• The total nominal value assigned to shares of that class.
Annual Accounts
Annual Accounts, often known as financial statements, financial reports, or accounting statements, depict a company's accounting and represent its economic structure.
The financial statements consist of:
• Balance Sheet,
• Notes to the financial statements,
• Profit & Loss account,
• Cash flow statements
The Capital Companies Act obliges the directors of companies to prepare annual accounts in the three months following the date of their closing. These shall include the management report, consisting of the statement of non-financial information, when applicable, the proposed profit allocation, and the consolidated accounts and management report.
Publicly available information in the annual accounts can be viewed by anybody. For example, potential investors may have access to it.
Aspect |
Confirmation Statement |
Annual Accounts |
---|---|---|
Purpose |
Confirms and updates company details |
Provides financial overview of the company |
Content |
Details about compnay directors ,sahreholders,address |
Balance sheet ,profit lossaccount,cash flow |
Frequency |
Annulaly ,within 14 days of the anniversary |
Annually,within nine months of financial year end |
Filing Body |
Companies House |
Companies House |
Focus |
Company structure and registration details |
Financial performance and position |
Conclusion
Both statements play a vital part in the life cycle of any business. It is the Confirmation Statement that keeps information regarding your company current, enabling the public to peruse this information and thus providing transparency coupled with regulatory oversight. Annual Accounts, however, give a comprehensive snapshot about the financial condition of the company, providing a basis for financial planning, making investment decisions, or ensuring regulatory compliances.
In summary, though the Confirmation Statement is in itself somewhat easier to deal with at the outset than the Annual Accounts, both documents tend to be similar in many ways. Understanding these differences is critical to keeping accurate firm records and following legal requirements. By completing both documents on time and accurately, you help to ensure your company's openness and financial integrity..
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