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PART 8U.K.REVISION OF DEFECTIVE [F1ACCOUNTS AND REPORTS]

Textual Amendments

Revision of defective accounts [F2, strategic report] [F3or energy and carbon report] U.K.

23.  Sections 454 to 456 apply to LLPs, modified so that they read as follows—

454.     [F4“Voluntary revision of accounts etc]

[F5(1)  If it appears to the members of an LLP that the LLP’s annual accounts [F6, the LLP’s strategic report] or the LLP’s energy and carbon report did not comply with the requirements of this Act, they may prepare revised accounts [F7, a revised strategic report] or a revised energy and carbon report.]

(2) Where copies of the previous accounts [F8, strategic report] [F9or energy and carbon report] have been sent out to members or delivered to the registrar, the revisions must be confined to—

(a)the correction of those respects in which the previous accounts [F10, strategic report] [F9or energy and carbon report] did not comply with the requirements of this Act, and

(b)the making of any necessary consequential alterations.

(3) The Companies (Revision of Defective Accounts and Reports) Regulations 2008 (S.I. 2008/373) apply for the purposes of this section with the following modifications—

(a)references to a company include references to an LLP; F11...

(b)references to a director or to an officer of a company include references to a member of an LLP;

[F12(c)references to a directors’ report include references to an energy and carbon report;

(d)references to a revised directors’ report include references to revised energy and carbon report except for the purposes of regulation 7;

(e)references to the date on which the original directors’ report was approved by the board of directors include references to the date on which the original energy and carbon report was approved by the members of an LLP;

(f)references to the date on which a revised directors’ report is approved by the board of directors include references to the date on which a revised energy and carbon report is approved by the members of an LLP; and

(g)the reference in regulation 5 to section 419(3) and (4) includes a reference to section 419(2) and (3) as applied and modified by regulation 12B.]

455.    Secretary of State's notice in respect of accounts [F13, strategic report] [F14or energy and carbon report]

(1) This section applies where copies of an LLP's annual accounts [F15, strategic report] [F16or energy and carbon report] have been delivered to the registrar, and it appears to the Secretary of State that there is, or may be, a question whether the accounts [F17or report] comply with the requirements of this Act.

(2) The Secretary of State may give notice to the members of the LLP indicating the respects in which it appears that such a question arises or may arise.

(3) The notice must specify a period of not less than one month for the members to give an explanation of the accounts [F18, strategic report] [F19or energy and carbon report] or prepare revised accounts [F20, a revised strategic report] [F21or a revised energy and carbon report].

(4) If at the end of the specified period, or such longer period as the Secretary of State may allow, it appears to the Secretary of State that the members have not—

(a)given a satisfactory explanation of the accounts [F22or [F23reports]] , or

(b)revised the accounts [F22or [F23reports]] so as to comply with the requirements of this Act,

the Secretary of State may apply to the court.

(5) The provisions of this section apply equally to revised annual accounts [F24, revised strategic reports] [F25and revised energy and carbon reports], in which case they have effect as if the references to revised accounts [F26or reports] were references to further revised accounts [F26or reports].

456.    Application to court in respect of defective accounts [F27, strategic report] [F28or energy and carbon report]

(1) An application may be made to the court—

(a)by the Secretary of State, after having complied with section 455, or

(b)by [F29the [F30Financial Reporting Council Limited]],

for a declaration (in Scotland, a declarator) that the annual accounts of an LLP do not comply, [F31a strategic report does not comply] [F32, or an energy and carbon report does not comply,] with the requirements of this Act and for an order requiring the members of the LLP to prepare revised accounts [F33or a revised report].

(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 as to—

(a)the auditing of the accounts, F34...

[F35(aa)the revision of any [F36strategic report or] energy and carbon report, and]

(b)the taking of steps by the members 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.

[F37(3A) If the court orders the preparation of a [F38revised strategic report or] revised energy and carbon report, it may give directions as to—

(a)the taking of steps by the members to bring the making of the order to the notice of persons likely to rely on the previous report, and

(b)such other matters as the court thinks fit.]

(4) If the court finds that the accounts [F39or report] did not comply with the requirements of this Act it may order that all or part of—

(a)the costs (in Scotland, expenses) of and incidental to the application, and

(b)any reasonable expenses incurred by the LLP in connection with or in consequence of the preparation of revised accounts [F40or a revised report],

are to be borne by such of the members as were party to the approval of the defective accounts [F39or report]. For this purpose every member of the LLP at the time of the approval of the accounts [F39or report] shall be taken to have been a party to the approval unless he shows that he took all reasonable steps to prevent that approval.

(5) Where the court makes an order under subsection (4) it shall have regard to whether the members party to the approval of the defective accounts [F39or report] knew or ought to have known that the accounts [F39or report] did not comply with the requirements of this Act, and it may exclude one or more members from the order or order the payment of different amounts by different members.

(6) On the conclusion of proceedings on an application under this section, the applicant must send to the registrar for registration a copy of the court order or, as the case may be, give notice to the registrar that the application has failed or been withdrawn.

(7) The provisions of this section apply equally to revised annual accounts [F41, revised strategic reports] [F42and revised energy and carbon reports], in which case they have effect as if the references to revised accounts [F43or reports] were references to further revised accounts [F43or reports].”

Textual Amendments

Disclosure of informationU.K.

24.  Sections 458 to 461 M1 apply to LLPs, modified so that they read as follows—

“458.    Disclosure of information by tax authorities

(1) The Commissioners for Her Majesty's Revenue and Customs may disclose information to [F44the [F45Financial Reporting Council Limited]] for the purpose of facilitating—

(a)the taking of steps by [F44the [F45Financial Reporting Council Limited]] to discover whether there are grounds for an application to the court under section 456 (application in respect of [F46defective accounts, strategic report or energy and carbon report] etc), or

(b)a decision by [F44the [F45Financial Reporting Council Limited]] whether to make such an application.

(2) This section applies despite any statutory or other restriction on the disclosure of information. Provided that, in the case of personal data within the meaning of the Data Protection Act 1998 (c.29), information is not to be disclosed in contravention of that Act.

(3) Information disclosed to [F44the [F45Financial Reporting Council Limited]] under this section—

(a)may not be used except in or in connection with—

(i)taking steps to discover whether there are grounds for an application to the court under section 456, or

(ii)deciding whether or not to make such an application,

or in, or in connection with, proceedings on such an application; and

(b)must not be further disclosed except—

(i)to the person to whom the information relates, or

(ii)in, or in connection with, proceedings on any such application to the court.

(4) A person who contravenes subsection (3) commits an offence unless—

(a)he did not know, and had no reason to suspect, that the information had been disclosed under this section, or

(b)he took all reasonable steps and exercised all due diligence to avoid the commission of the offence.

(5) A person guilty of an offence under subsection (4) is liable—

(a)on conviction on indictment, to imprisonment for a term not exceeding two years or a fine (or both);

(b)on summary conviction—

(i)in England and Wales, to imprisonment for a term not exceeding twelve months or to a fine not exceeding the statutory maximum (or both);

(ii)in Scotland or Northern Ireland, to imprisonment for a term not exceeding six months, or to a fine not exceeding the statutory maximum (or both).

(6) Where an offence under this section is committed by a body corporate, every officer of the body who is in default also commits the offence. For this purpose—

(a)any person who purports to act as director, manager or secretary of the body is treated as an officer of the body, and

(b)if the body is a company, any shadow director is treated as an officer of the company.

459.    Power of [F44the [F45Financial Reporting Council Limited]] to require documents, information and explanations

(1) This section applies where it appears to [F44the [F45Financial Reporting Council Limited]] that there is, or may be, a question whether an LLP's annual accounts [F47, strategic report] [F48or energy and carbon report] comply with the requirements of this Act.

(2) [F44The [F45Financial Reporting Council Limited]] may require any of the persons mentioned in subsection (3) to produce any document, or to provide him with any information or explanations, that he may reasonably require for the purpose of—

(a)discovering whether there are grounds for an application to the court under section 456, or

(b)deciding whether to make such an application.

(3) Those persons are—

(a)the LLP;

(b)any member, employee, or auditor of the LLP;

(c)any persons who fell within paragraph (b) at a time to which the document or information required by [F44the [F45Financial Reporting Council Limited]] relates.

(4) If a person fails to comply with such a requirement, [F44the [F45Financial Reporting Council Limited]] may apply to the court.

(5) If it appears to the court that the person has failed to comply with a requirement under subsection (2), it may order the person to take such steps as it directs for securing that the documents are produced or the information or explanations are provided.

(6) A statement made by a person in response to a requirement under subsection (2) or an order under subsection (5) may not be used in evidence against him in any criminal proceedings.

(7) Nothing in this section compels any person to disclose documents or information in respect of which a claim to legal professional privilege (in Scotland, to confidentiality of communications) could be maintained in legal proceedings.

(8) In this section “document” includes information recorded in any form.

460.    Restrictions on disclosure of information obtained under compulsory powers

(1) This section applies to information (in whatever form) obtained in pursuance of a requirement or order under section 459 (power of [F45Financial Reporting Council Limited] to require documents etc) that relates to the private affairs of an individual or to any particular business.

(2) No such information may, during the lifetime of that individual or so long as that business continues to be carried on, be disclosed without the consent of that individual or the person for the time being carrying on that business.

(3) This does not apply—

(a)to disclosure permitted by section 461 (permitted disclosure of information obtained under compulsory powers), or

(b)to the disclosure of information that is or has been available to the public from another source.

(4) A person who discloses information in contravention of this section commits an offence, unless—

(a)he did not know, and had no reason to suspect, that the information had been disclosed under section 459, or

(b)he took all reasonable steps and exercised all due diligence to avoid the commission of the offence.

(5) A person guilty of an offence under this section is liable—

(a)on conviction on indictment, to imprisonment for a term not exceeding two years or a fine (or both);

(b)on summary conviction—

(i)in England and Wales, to imprisonment for a term not exceeding twelve months or to a fine not exceeding the statutory maximum (or both);

(ii)in Scotland or Northern Ireland, to imprisonment for a term not exceeding six months, or to a fine not exceeding the statutory maximum (or both).

(6) Where an offence under this section is committed by a body corporate, every officer of the body who is in default also commits the offence. For this purpose—

(a)any person who purports to act as director, manager or secretary of the body is treated as an officer of the body, and

(b)if the body is a company, any shadow director is treated as an officer of the company.

461.    Permitted disclosure of information obtained under compulsory powers

(1) The prohibition in section 460 of the disclosure of information obtained in pursuance of a requirement or order under section 459 (power of [F45Financial Reporting Council Limited] to require documents etc) that relates to the private affairs of an individual or to any particular business has effect subject to the following exceptions.

(2) It does not apply to the disclosure of information for the purpose of facilitating the carrying out by [F44the [F45Financial Reporting Council Limited]] of its functions under section 456.

(3) It does not apply to disclosure to—

(a)the Secretary of State,

(b)the Department of Enterprise, Trade and Investment for Northern Ireland,

(c)the Treasury,

(d)the Bank of England,

[F49(e) Financial Conduct Authority,

(ea)Prudential Regulation Authority, or]

(f)the Commissioners for Her Majesty's Revenue and Customs.

(4) It does not apply to disclosure—

(a)for the purpose of assisting the body known as the Professional Oversight Board established under the articles of association of the Financial Reporting Council Limited (registered number 02486368) to exercise its functions under Part 42 of this Act;

(b)with a view to the institution of, or otherwise for the purposes of, disciplinary proceedings relating to the performance by an accountant or auditor of his professional duties;

(c)for the purpose of enabling or assisting the Secretary of State or the Treasury to exercise any of their functions under any of the following—

(i)the Companies Acts,

(ii)Part 5 of the Criminal Justice Act 1993 (c.36) (insider dealing),

(iii)the Insolvency Act 1986 (c.45) or the Insolvency (Northern Ireland) Order 1989 (S.I. 1989/2405 (N.I. 19)),

(iv)the Company Directors Disqualification Act 1986 (c.46) or the Company Directors Disqualification (Northern Ireland) Order 2002 (S.I. 2002/3150 (N.I. 4)),

(v)the Financial Services and Markets Act 2000 (c.8);

(d)for the purpose of enabling or assisting the Department of Enterprise, Trade and Investment for Northern Ireland to exercise any powers conferred on it by the enactments relating to companies, directors' disqualification or insolvency;

[F50(e) for the purpose of enabling or assisting the Bank of England to exercise its functions when acting otherwise than in its capacity as the Prudential Regulation Authority;]

(f)for the purpose of enabling or assisting the Commissioners for Her Majesty's Revenue and Customs to exercise their functions;

(g)for the purpose of enabling or assisting the [F51Financial Conduct Authority or the Prudential Regulation Authority] to exercise its functions under any of the following—

(i)the legislation relating to friendly societiesF52...,

[F53(ia)the legislation relating to a society, other than a society registered as a credit union, which is—

(aa)a registered society within the meaning given by section 1(1) of the Co-operative and Community Benefit Societies Act 2014, or

(ab)a society registered or deemed to be registered under the Industrial and Provident Societies Act (Northern Ireland) 1969,]

(ii)the Building Societies Act 1986 (c.53),

(iii)Part 7 of the Companies Act 1989 (c.40),

(iv)the Financial Services and Markets Act 2000; or

(h)in pursuance of any [F54retained] Community obligation.

(5) It does not apply to disclosure to a body exercising functions of a public nature under legislation in any country or territory outside the United Kingdom that appear to [F44the [F45Financial Reporting Council Limited]] to be similar to its functions under section 456 for the purpose of enabling or assisting that body to exercise those functions.

(6) In determining whether to disclose information to a body in accordance with subsection (5), [F44the [F45Financial Reporting Council Limited]] must have regard to the following considerations—

(a)whether the use which the body is likely to make of the information is sufficiently important to justify making the disclosure;

(b)whether the body has adequate arrangements to prevent the information from being used or further disclosed other than—

(i)for the purposes of carrying out the functions mentioned in that subsection, or

(ii)for other purposes substantially similar to those for which information disclosed to [F44the [F45Financial Reporting Council Limited]] could be used or further disclosed.

(7) Nothing in this section authorises the making of a disclosure in contravention of the Data Protection Act 1998 (c.29).”

Textual Amendments

Marginal Citations

M1Sections 458, 460 and 461 were amended by paragraphs 244 to 246 of Schedule 1 to S.I. 2008/948.