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[U9]Uk Private Limited Company

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When a private limited company is incorporated companies house advise the company of the accounting reference date and a set of financial accounts are required to be made up and submitted from the day of incorporation to this accounting reference date. The accounting reference date is set by companies house as the last day of the month 12 months after the date of incorporation.

For example a company registered on 7 January would have an accounting reference date of 31 January the following year. Financial accounts are required for the period from 7 January one year to the 31 January the following year.

The financial accounting period for a limited company which has been trading in previous years starts on the day after the accounting reference date and continues until the next accounting reference date. In the example above the final accounts including profit and loss account, balance sheet and notes to the accounts including audit report where required would be prepared from 1 February until 31 January.

The accounting reference date can be changed by a limited company by sending to companies house form 225. There is a time limit on when the form can be submitted which in any financial year is the day before the accounts are due for delivery to companies house.

There are a number of reasons why the directors of a limited company might wish to change its financial year end although in the vast majority of cases the financial year is not changed.

Common reasons for changing the financial year end date would be to bring the year end date into line with other business interests such as an associated company. Seasonal and trading factors may make one month end more appropriate or the company might wish more time to prepare a particular set of final accounts although it can be a problem if the date is changed more than once in a 5 year period.

A significant reason for changing the financial year end of a limited company would be to bring the company financial accounting period into line with the tax year as tax rules change from year to year and accounting and tax alignment simplifies the tax calculation as only one years tax rules would apply instead of two tax years rules when the tax year end is straddled.

For limited companies in the UK the practise in recent years has been for tax rules and capital tax allowances changes to be announced in the budget each year which is the third week of March and the tax rules to be applied from the 1 April the following year. An accounting year in line with the tax year end would then be 1 April to 31 March each year.

A new private company filing its first set of annual accounts must do so within 22 months of incorporation. In subsequent years the financial accounts need to be submitted to companies house within 10 months of the company accounting reference date. Companies house normally send a reminder of when the accounts need to be filed 6 to 8 weeks prior to the deadline date.

Companies house automatically impose an escalating scale of civil penalties on private companies for the late filing of the annual accounts as follows

Up to 3 months late the penalty fine is 100 pounds.

Over 3 months and up to 6 months the penalty fine is 250 pounds.

Over 6 months and up to 12 months the penalty fine is 500 pounds.

Over 12 months the penalty fine is 1000 pounds.

The accounting documents to be sent to companies house which are required to be prepared in a specific format and in addition to stating the registered office of the company and the company registration number for identification purposes must also send

Profit and loss account or income and expenditure account for a non profit organisation.

Balance sheet signed and dated by a company director stating the company asset and liabilities balances.

Directors report signed by a director or company secretary describing the companies activities and also including for companies not classified as small and exempt a business review of future performance.

Auditors report signed by the auditor unless the company is exempt from audit under the small companies exemption rules.

When a small private company submits abbreviated accounts and takes advantage of the exemptions then the accounts must also contain the statutory statements as notes to the accounts advising the basis and exemptions under which the annual accounts have been prepared.

In May 2001 the Private Security Industry Act was passed by the British Parliament. This paved the way for a system of licensing for the private security industry. The Act separated the industry into four key segments: door minders/bouncers, wheel-clampers, manned security and private investigators.

The licensing system is being implemented by the Security Industry Authority (SIA). Everything so far is running fairly smoothly, with the entire security industry in England and Wales being regulated as from 2005 on a sector by sector basis. The PI sector is last on the list, and at the time of writing (August 2008) there is still no definite date for the introduction of licensing for PIs.

At present it is too early to say exactly how the new licensing system for private investigators will operate. However, the SIA say that operators will need an SIA licence "if they are engaged in surveillance, inquiries or investigations for the purpose of obtaining information about a person or person(s) activities or whereabouts, or the circumstances by which property has been lost or damaged."

The SIA say that the following activities will NOT require a licence:

* activities exclusively for the purposes of market research;

* activities exclusively concerned with a credit check;

* professional activities of practising solicitors and Barristers;

* professional activities of practising accountants;

* professional activities of journalists and broadcasters;

* activities exclusively relating to reference to registers which are open to the public; registers or records to which a person has a right of access; and published works; and

* activities carried out with the knowledge or consent of the subject of the investigation.

Once licensing is introduced, anyone involved in providing contracted private investigation services will need a licence. This includes employees, employers, managers, supervisors and directors or partners of private investigation companies.

According to the SIA website (see below), a partial Regulatory Impact Assessment (RIA) has been carried out on the licensing of private investigators. This was a wide-ranging review, which looked at a range of options, and all interested parties were invited to submit their comments. The next stage is that the Home Office will publish a full Implementation Impact Assessment (IIA) that will give details of the approach to be taken. As yet there is no indication on when the IIA will be published.

The above sums up the information available about the proposed licensing of private investigators in England and Wales (and, by extension, Scotland and Northern Ireland) at the present time. For the very latest information, you may wish to check the SIA website at www.the-sia.org.uk. You can also phone the SIA on 08702 430 100, or write to them at Security Industry Authority, PO Box 9, Newcastle Upon Tyne, NE82 6YX, UK.

If you are currently considering becoming a private investigator, there is every incentive to proceed now before licensing is introduced. At present, there is no requirement for investigators to be licensed (although if, for example, your work involves collecting money on a client's behalf, you may have to apply for a consumer credit licence). Once licensing comes in, however, would-be entrants to the profession may be required to obtain specific job-related qualifications, while those already working in the sector may qualify for full or partial exemption from this requirement.

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