Company Formation FAQ - Accounting Records

Do all companies have to keep accounting records?

Yes. Every company, whether or not they are trading, must keep accounting records.

What must accounting records include?

Accounting records must in particular contain: -

• Entries showing all money received and expended by the company; and
• A record of the assets and liabilities of the company.

Also, where the company's business involves dealing in goods, the records must contain: -

• statements of stock held by the company at the end of each financial year;
• all statements of stock takings from which you have taken or prepared any statements of stock; and
• Statement of all goods sold and purchased, other than by ordinary retail trade. This should list the goods, the buyers and sellers.

Parent companies must ensure that any subsidiary undertaking keeps sufficient accounting records so that the directors of the parent company can prepare accounts that comply with the Companies Act or international accounting standards.

Where must a company keep its accounting records?

A company must keep its accounting records at its registered office address or a place that the directors think suitable. The records must be open to inspection by the company's officers at all times.

If the company holds the records at a place outside of the UK, it must send accounts and returns at least every six months and keep them in the UK. Those accounts and returns must disclose the financial position and enable the directors to prepare accounts that comply with the requirements of the Companies Act, including where the accounts are prepared using international accounting standards.

How long must a company keep its records?

Private companies must keep accounting records for three years from the date they were made. Public companies must keep them for six years.