21 Information in the public domain
‘It is much more convenient not to be a public company. As a private company you don’t have to give information to the public. . . ’
Marc Rich, Glencore plc
In a nutshell
Unlike sole traders and partners in partnerships, companies have limited liability. This means that the owners can only lose the money they put into the business, and nothing more.
In return for the benefits of limited liability, companies must provide information about their activities, including details about directors and shareholdings. This information is held in the public domain and is available to view for free online at Companies House.
Every company must file a Confirmation Statement at Companies House. This annual requirement confirms the information filed and publicly available is correct and up to date.
Companies must also file financial statements (‘accounts’) annually, although only the largest have to make extensive financial disclosures about their affairs.
Directors are legally responsible for submitting information to Companies House within statutory published filing deadlines.
Need to know 
All companies must prepare annual financial statements, known also as ‘statutory accounts’, for both shareholders and tax authorities (HMRC in the UK).
The nature and extent of financial information disclosed depends on the size of the company (see Optional detail section below). In general terms, the bigger the company, the more disclosure required.
PLCs (public limited companies), such as those listed on the Stock Exchange as well as large private companies, are required to file full statutory accounts. Full accounts comprise:
- ■profit and loss account (income statement)
- ■balance sheet (statement of financial position)
- ■extensive notes (providing detail to the numbers disclosed in the above statements).
In addition, a company must publish a directors' report. This will list the names of everyone who, at any time during the financial year, held the office of director.
In smaller companies, there is no requirement to publicly file the profit and loss account or directors’ report. Small companies can reduce disclosure further by filing a simplified set of accounts, known as abridged accounts. Abridged accounts provide very limited financial information about the performance (success) of the business.
All accounts, whether for a large or small company, full or abridged, must comply with relevant accounting standards and Companies Act requirements (see Chapter 19 Accounting and financial reporting standards and Chapter 20 External financial audit).
Why and when is this important? 
Financial accounts
The preparation of accounts is a legal responsibility placed on directors. Directors must prepare (or assume responsibility for preparing) financial statements and for filing the accounts within the statutory deadlines set for the company. The deadlines differ for public and private companies:
- ■Public limited companies: Accounts must be filed within 6 months* after the company’s year end (known as the accounting reference date).
- ■Private limited companies: Accounts must be filed within 9 months* after the accounting reference date.
(*Time periods may in exceptional circumstances be extended, as was the case during the Covid-19 pandemic.)
Companies House will impose fines for late filing and may take steps to strike off a company from the public record where the accounts are delivered late.
Director information
Companies must provide to Companies House details of directors such as the residential address of each director. This information will be placed on public record only if the residential address is used as the company’s registered office or director’s service address.
Companies House places no restrictions on how publicly filed information can be used. Directors who therefore use their home address as their registered office may receive unsolicited mail (or visits from creditors!). Mortgage or insurance agreements may prevent or restrict the use of a home address for business purposes and lenders or insurers may routinely scrutinise publicly available information to confirm there has been no breach.
The confirmation statement
The confirmation statement is an annual filing requirement for every company, including dormant companies. The confirmation statement confirms that information about the company provided to Companies House and displayed on the public register is accurate and up to date. The information disclosed includes registered address, principal activities, share capital, shareholder name(s) and shareholdings.
There is no financial penalty for filing the confirmation statement after the deadline; however, Companies House could start legal action against the company directors and will eventually remove the company from the register if it fails to provide the required information.
Nice to know 
Filed information remains on public record, i.e. in the public domain indefinitely, while the company is active. To improve corporate transparency, the records for companies dissolved (see Chapter 25 Insolvency and going concern risk) since 2010 are also now kept on public record and accessible online.
Any and all filings made by a company can be found by searching the company (by name) at the Companies House (gov.uk) website and searching under filing history. As well as Companies House, listed companies will have an ‘investor relations’ section on their own corporate websites which includes financial information, such as annual reports.
Directors’ remuneration
Directors’ remuneration (salary, bonus, long term incentives, pensions, perks) is an area of focus and interest, in particular for listed companies.
Disclosures depend on the size and nature of the company:
- ■Small unquoted companies do not have to disclose director remuneration unless they have not been concluded under ‘normal market conditions’ (while this term is not defined in legislation, it can be approximated by benchmarking to what an externally recruited director would have to be paid to perform a similar role).
- ■For larger unquoted companies, limited disclosures are required if the total of all remuneration paid to directors exceeds £200,000. In this instance, a breakdown of payments made to the highest paid director only must be disclosed in the filed accounts (note: the identity of the highest paid director does not have to be disclosed).
- ■Listed companies (PLCs with a stock market listing) must disclose the remuneration paid to each director separately as required by Stock Exchange Listing Rules. The figure must show the total remuneration paid to each director howsoever it has been ‘paid’ (i.e. whether salary, bonus, long-term incentive or pension).
Optional detail 
Size and disclosure requirements
Size limits as per December 2020 Companies House guidance:
| Type of company and threshold | Dormant – a company with: No significant accounting transactions during the accounting period | Very small (Micro) company – defined by size thresholds:
| Small company – defined by (higher) size thresholds
| Publicly listed companies and other large companies
|
| Filing disclosures |
|
|
| Full accounts comprising:
|
| Audit requirements | Audit not required unless shareholders holding at least 10% of the nominal value of issued share capital or holding 10% of any class of shares in the company demand it | Audit required (see Chapter 20 External financial audit) | ||
| Accounts sent to shareholders | Must include directors’ report | No directors’ report Profit and loss account Balance sheet Disclosure notes required by FRS105 | No directors’ report Profit and loss account Balance sheet Disclosure notes required by FRS102 | Full accounts required, comprising:
|
| Accounts sent to HMRC | No tax return required so no accounts required (HMRC write every five years to verify dormant status) | Same as version sent to shareholders | ||
*Medium-sized companies (defined as companies with turnover not more than £43.2m, balance sheet total not more than £21.6m, monthly average of employees not more than 250) have similar (although fewer) disclosure requirements to those of large companies.
Publicly available information at Companies House
Information available includes the following:
- ■Directors’ details (see below) plus changes in directors (appointments and resignations)
- ■Company secretary details (if relevant)
- ■Registered office address
- ■Company status
- ■Company type
- ■Nature of business
- ■Filing history
- ■Details of persons with significant control (greater than 25% of shares held)
- ■Share capital (how many shares the company has in issue)
- ■Names of shareholders and shareholdings.
Directors – personal details held in the public domain
- ■Full name
- ■Date of birth (month and year only)
- ■Nationality
- ■Occupation
- ■Country of residence
- ■Correspondence address (residential or other).
Reflect and embed your understanding 
- 1Are the time limits for filing private and public limited accounts reasonable or should they be shortened or lengthened?
- 2How easy is it to assess the financial performance and position of a small company using information publicly available from Companies House?
- 3Reflect on whether the small company exemptions from full disclosure are appropriate and the potential implications for corporate governance (see also question 4).
- 4What are the implications, if any, of the differing filing requirements according to company size? Consider from an investor, employee, lender perspective.
- 5Consider the merits of providing consistent and comparable financial information in the financial statements for all companies.
For the authors’ reflections on these questions, please go to financebook.co.uk
Where to spot in company accounts 
| Information | Where information can be found | Greggs plc |
|---|---|---|
| Accounts approved | Balance Sheet records date of signing and approval by directors | 16 March 2021 |
| Annual report and accounts published | Greggs plc website (investors) | 13 April 2021 |
| Confirmation Statement filed | Companies House website for Confirmation Statement and filing date | 19 April 2021 |
Consolidate and apply
As a ‘large’ company, Greggs plc is required to publish full accounts. Refer to Chapter 36 (p. 445 onwards) to review the financial statements (profit and loss account, balance sheet and full notes). To see how the concepts covered in this chapter have been applied within Greggs plc, review Chapter 36, p. 409.
Watch out for in practice 
- →Age of company.
- →Trading history.
- →Frequent (i.e. more than annual) filing of the Confirmation Statement.
- →Frequent changes in directors.
- →Changes in share ownership.
- →Change in accounting year end of company.
- →Frequent change in address.
- →Changes in capital structure.
- →Changes in articles of association.
- →Pattern of accounts filing dates (e.g. for listed companies, a delay may indicate the presence of significant or unusual issues that might have affected date of filing).