Part VII Accounts and Audit
Chapter I Provisions Applying to Companies Generally
Revision of defective accounts and reports
F1245B Application to court in respect of defective accounts.
(1)
An application may be made to the court—
(a)
by the Secretary of State, after having complied with section 245A, or
(b)
by a person authorised by the Secretary of State for the purposes of this section,
for a declaration or declarator that the annual accounts of a company do not comply with the requirements of this Act F2(or, where applicable, of Article 4 of the IAS Regulation) and for an order requiring the directors of the company to prepare revised accounts.
(2)
Notice of the application, together with a general statement of the matters at issue in the proceedings, shall be given by the applicant to the registrar for registration.
(3)
If the court orders the preparation of revised accounts, it may give directions with respect to—
(a)
the auditing of the accounts,
(b)
the revision of any directors’ report F3, directors’ remuneration report or summary financial statement, and
(c)
the taking of steps by the directors to bring the making of the order to the notice of persons likely to rely on the previous accounts,
and such other matters as the court thinks fit.
(4)
If the court finds that the accounts did not comply with the requirements of this Act F2(or, where applicable, of Article 4 of the IAS Regulation) it may order that all or part of—
(a)
the costs (or in Scotland expenses) of and incidental to the application, and
(b)
any reasonable expenses incurred by the company in connection with or in consequence of the preparation of revised accounts,
shall be borne by such of the directors as were party to the approval of the defective accounts.
For this purpose every director of the company at the time the accounts were approved shall be taken to have been a party to their approval unless he shows that he took all reasonable steps to prevent their being approved.
(5)
Where the court makes an order under subsection (4) it shall have regard to whether the directors party to the approval of the defective accounts knew or ought to have known that the accounts did not comply with the requirements of this Act F2(or, where applicable, of Article 4 of the IAS Regulation), and it may exclude one or more directors from the order or order the payment of different amounts by different directors.
(6)
On the conclusion of proceedings on an application under this section, the applicant shall give to the registrar for registration an office copy of the court order or, as the case may be, notice that the application has failed or been withdrawn.
(7)
The provisions of this section apply equally to revised annual accounts, in which case the references to revised accounts shall be read as references to further revised accounts.