The Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008

Group accounts U.K.

10.  Sections 398 to 408 M1 apply to LLPs, modified so that they read as follows—

“Option to prepare group accounts

F1 398.   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Duty to prepare group accounts

399.—F2 (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2) If at the end of a financial year [F3 an LLP] is a parent LLP the members, as well as preparing individual accounts for the year, must prepare group accounts for the year unless the LLP is exempt from that requirement.

[F4 (2A) An LLP is exempt from the requirement to prepare group accounts if—

(a) at the end of the financial year, the LLP is subject to the small LLPs regime, and

(b) is not a member of a group which, at any time during the financial year, has an undertaking falling within subsection (2B) as a member.

(2B) An undertaking falls within this subsection if—

(a) it is established under the law of an EEA State,

(b) it has to prepare accounts in accordance with Directive 2013/34/EU of the European Parliament and of the Council on the annual financial statements, consolidated financial statements and related reports of certain types of undertakings, and

(c) it is—

(i) an undertaking which has been designated by an EEA State as a public-interest entity under that Directive,

(ii) an undertaking whose transferable securities are admitted to trading on a regulated market in an EEA State,

(iii) a credit institution within the meaning given by Article 4(1)(1) of Regulation (EU) No 575/2013 of the European Parliament and of the Council on prudential requirements for credit institutions and investment firms, other than one listed in Article 2 of Directive 2013/36/EU of the European Parliament and of the Council on access to the activity of credit institutions and investment firms and the prudential supervision of credit institutions and investment firms, or

(iv) an insurance undertaking within the meaning given by Article 2(1) of Council Directive 91/674/EEC of the European Parliament and of the Council on the annual accounts and consolidated accounts of insurance undertakings.]

(3) There are exemptions under—

(a) section 400 (LLP included in EEA accounts of larger group),

(b) section 401 (LLP included in non-EEA accounts of larger group), and

(c) section 402 (LLP none of whose subsidiary undertakings need be included in the consolidation).

(4) An LLPF5 ... which is exempt from the requirement to prepare group accounts, may do so.

Exemption for LLP included in EEA group accounts of larger group

400.— (1) An LLP is exempt from the requirement to prepare group accounts if it is itself a subsidiary undertaking and its immediate parent undertaking is established under the law of an EEA State, in the following cases—

(a) where the LLP is a wholly-owned subsidiary of that parent undertaking;

[F6 (b) where that parent undertaking holds 90% or more of the shares in the LLP and the remaining members have approved the exemption;

(c) where that parent undertaking holds more than 50% (but less than 90%) of the shares in the LLP and notice requesting the preparation of group accounts has not been served on the LLP by the members holding in aggregate at least 5% of the shares in the LLP.

Such notice must be served at least six months before the end of the financial year to which it relates.]

Such notice must be served not later than six months after the end of the financial year before that to which it relates.

(2) Exemption is conditional upon compliance with all of the following conditions—

(a) the LLP must be included in consolidated accounts for a larger group drawn up to the same date, or to an earlier date in the same financial year, by a parent undertaking established under the law of an EEA State;

(b) those accounts must be drawn up and audited, and that parent undertaking's annual report must be drawn up, according to that law—

[F7 (i) in accordance with the provisions of Directive 2013/34/EU of 26 June 2013 on the annual financial statements etc. of certain types of undertakings, or]

(ii) in accordance with international accounting standards;

(c) the LLP must disclose in [F8 the notes to] its individual accounts that it is exempt from the obligation to prepare and deliver group accounts;

(d) the LLP must state in its individual accounts the name of the parent undertaking that draws up the group accounts referred to above and—

[F9 (i) the address of the undertaking’s registered office (whether in or outside the United Kingdom), or]

(ii) if it is unincorporated, the address of its principal place of business;

(e) the LLP must deliver to the registrar, within the period for filing its accounts and auditor's report for the financial year in question, copies of those group accounts, together with the auditor's report on them;

(f) any requirement of Part 35 of this Act as to the delivery to the registrar of a certified translation into English must be met in relation to any document comprised in the accounts and reports delivered in accordance with paragraph (e).

(3) For the purposes of subsection (1)(b) [F10 and (c)] shares held by a wholly-owned subsidiary of the parent undertaking, or held on behalf of the parent undertaking or a wholly-owned subsidiary, shall be attributed to the parent undertaking.

(4) The exemption does not apply to an LLP [F11 which is a traded LLP].

F12 (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Exemption for LLP included in non-EEA group accounts of larger group

401.— (1) An LLP is exempt from the requirement to prepare group accounts if it is itself a subsidiary undertaking and its parent undertaking is not established under the law of an EEA State, in the following cases—

(a) where the LLP is a wholly-owned subsidiary of that parent undertaking;

[F13 (b) where that parent undertaking holds 90% or more of the shares in the LLP and the remaining members have approved the exemption;

(c) where that parent undertaking holds more than 50% (but less than 90%) of the shares in the LLP and notice requesting the preparation of group accounts has not been served on the LLP by the members holding in aggregate at least 5% of the shares in the LLP.

Such notice must be served not later than six months after the end of the financial year before that to which it relates.]

(2) Exemption is conditional upon compliance with all of the following conditions—

(a) the LLP and all of its subsidiary undertakings must be included in consolidated accounts for a larger group drawn up to the same date, or to an earlier date in the same financial year, by a parent undertaking;

[F14 (b) those accounts must be drawn up—

(i) in accordance with the provisions of Directive 2013/34/EU of 26 June 2013 on the annual financial statements etc. of certain types of undertakings,

(ii) in a manner equivalent to consolidated accounts so drawn up,

(iii) in accordance with international accounting standards adopted pursuant to the IAS Regulation, or

(iv) in accordance with accounting standards which are equivalent to such international accounting standards, as determined pursuant to Commission Regulation (EC) No. 1569/2007 of 21 December 2007 establishing a mechanism for the determination of equivalence of accounting standards applied by third country issuers of securities pursuant to Directives 2003/71/EC and 2004/109/EC of the European Parliament and of the Council;]

(c) the group accounts must be audited by one or more persons authorised to audit accounts under the law under which the parent undertaking which draws them up is established;

(d) the LLP must disclose in its individual accounts that it is exempt from the obligation to prepare and deliver group accounts;

(e) the LLP must state in its individual accounts the name of the parent undertaking which draws up the group accounts referred to above and—

[F15 (i) the address of the undertaking’s registered office (whether in or outside the United Kingdom), or]

(ii) if it is unincorporated, the address of its principal place of business;

(f) the LLP must deliver to the registrar, within the period for filing its accounts and auditor's report for the financial year in question, copies of the group accounts, together with the auditor's report on them;

(g) any requirement of Part 35 of this Act as to the delivery to the registrar of a certified translation into English must be met in relation to any document comprised in the accounts and reports delivered in accordance with paragraph (f).

(3) For the purposes of subsection (1)(b) [F16 and (c)] shares held by a wholly-owned subsidiary of the parent undertaking, or held on behalf of the parent undertaking or a wholly-owned subsidiary, shall be attributed to the parent undertaking.

(4) The exemption does not apply to an LLP [F17 which is a traded LLP].

F18 (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Exemption if no subsidiary undertakings need be included in the consolidation

402.   A parent LLP is exempt from the requirement to prepare group accounts if under section 405 all of its subsidiary undertakings could be excluded from consolidation in non-IAS group accounts.

Group accounts: applicable accounting framework

403.— (1) The group accounts of a parent LLP may be prepared—

(a) in accordance with section 404 (“ non-IAS group accounts”), or

(b) in accordance with international accounting standards (“IAS group accounts”).

This is subject to the following provisions of this section.

(2) After the first financial year in which the members of a parent LLP prepare IAS group accounts (“the first IAS year”), all subsequent group accounts of the LLP must be prepared in accordance with international accounting standards unless there is a relevant change of circumstance. [F19 This is subject to subsection (3A).]

(3) There is a relevant change of circumstance if, at any time during or after the first IAS year—

(a) the LLP becomes a subsidiary undertaking of another undertaking that does not prepare IAS group accounts,

(b) the LLP ceases to be an LLP with securities admitted to trading on a regulated market in an EEA State, or

(c) a parent undertaking of the LLP ceases to be an undertaking with securities admitted to trading on a regulated market in an EEA State.

[F20 (3A) After a financial year in which the members of a parent LLP prepare IAS group accounts, the members may change to preparing non-IAS group accounts for a reason other than a relevant change of circumstance provided they have not changed to non-IAS group accounts in the period of five years preceding the first day of that financial year.

(3B) In calculating the five year period for the purpose of subsection (3A), no account should be taken of a change due to a relevant change of circumstance.]

(4) If, having changed to preparing non-IAS group accountsF21 ..., the members again prepare IAS group accounts for the LLP, subsections (2) and (3) apply again as if the first financial year for which such accounts are again prepared were the first IAS year.

Non-IAS group accounts

404.— [F22 (A1) Non-IAS group accounts must state, in respect of the parent LLP—

(a) the part of the United Kingdom in which the LLP is registered,

(b) the LLP’s registered number,

(c) the address of the LLP’s registered office, and

(d) where appropriate, the fact that the LLP is being wound up.]

(1) Non-IAS group accounts must comprise—

(a) a consolidated balance sheet dealing with the state of affairs of the parent LLP and its subsidiary undertakings, and

(b) a consolidated profit and loss account dealing with the profit or loss of the parent LLP and its subsidiary undertakings.

(2) The accounts must give a true and fair view of the state of affairs as at the end of the financial year, and the profit or loss for the financial year, of the undertakings included in the consolidation as a whole, so far as concerns members of the LLP.

(3) The accounts must comply with the provisions of—

(a) regulation 6 of the Small Limited Liability Partnerships (Accounts) Regulations 2008 (non-IAS group accounts of small parent LLP opting to prepare group accounts) (S.I. 2008/1912), or

(b) regulation 6 of the Large and Medium-sized Limited Liability Partnerships (Accounts) Regulations 2008 (non-IAS group accounts of large and medium-sized parent LLPs) (S.I. 2008/1913),

as to the form and content of the consolidated balance sheet and consolidated profit and loss account, and additional information to be provided by way of notes to the accounts..

(4) If compliance with the regulations specified in subsection (3), and any other provision made by or under this Act as to the matters to be included in an LLP's group accounts or in notes to those accounts, would not be sufficient to give a true and fair view, the necessary additional information must be given in the accounts or in a note to them.

(5) If in special circumstances compliance with any of those provisions is inconsistent with the requirement to give a true and fair view, the members must depart from that provision to the extent necessary to give a true and fair view. Particulars of any such departure, the reasons for it and its effect must be given in a note to the accounts.

Non-IAS group accounts: subsidiary undertakings included in the consolidation

405.— (1) Where a parent LLP prepares non-IAS group accounts, all the subsidiary undertakings of the LLP must be included in the consolidation, subject to the following exceptions.

(2) A subsidiary undertaking may be excluded from consolidation if its inclusion is not material for the purpose of giving a true and fair view (but two or more undertakings may be excluded only if they are not material taken together).

(3) A subsidiary undertaking may be excluded from consolidation where—

(a) severe long-term restrictions substantially hinder the exercise of the rights of the parent LLP over the assets or management of that undertaking, or

(b) [F23 extremely rare circumstances mean that] the information necessary for the preparation of group accounts cannot be obtained without disproportionate expense or undue delay, or

(c) the interest of the parent LLP is held exclusively with a view to subsequent resale.

(4) The reference in subsection (3)(a) to the rights of the parent LLP and the reference in subsection (3)(c) to the interest of the parent LLP are, respectively, to rights and interests held by or attributed to the LLP for the purposes of the definition of “parent undertaking” (see section 1162) in the absence of which it would not be the parent LLP.

[F24 IAS group accounts

406.— (1) IAS group accounts must state—

(a) the part of the United Kingdom in which the LLP is registered,

(b) the LLP’s registered number,

(c) the address of the LLP’s registered office, and

(d) where appropriate, the fact that the LLP is being wound up.

(2) The notes to the accounts must state that the accounts have been prepared in accordance with international accounting standards.]

Consistency of financial reporting within group

407.— (1) The members of a parent LLP must secure that the individual accounts of—

(a) the parent LLP, and

(b) each of its subsidiary undertakings,

are all prepared using the same financial reporting framework, except to the extent that in their opinion there are good reasons for not doing so.

(2) Subsection (1) does not apply if the members do not prepare group accounts for the parent LLP.

(3) Subsection (1) only applies to accounts of subsidiary undertakings that are required to be prepared under this Part.

(4) Subsection (1)(a) does not apply where the members of a parent LLP prepare IAS group accounts and IAS individual accounts.

Individual profit and loss account where group accounts prepared

408.— (1) This section applies where—

(a) an LLP prepares group accounts in accordance with this Act, and

[F25 (b) the LLP’s individual balance sheet shows the LLP’s profit and loss for the financial year determined in accordance with this Act.]

F26 (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) The LLP's individual profit and loss account must be approved in accordance with section 414(1) (approval by members) but may be omitted from the LLP's annual accounts for the purposes of the other provisions of this Act.

(4) The exemption conferred by this section is conditional upon its being disclosed in the LLP's annual accounts that the exemption applies.”

Textual Amendments

F1 Words in reg. 10 omitted (with effect in accordance with reg. 2(5)(b) of the amending S.I.) by virtue of The Statutory Auditors Regulations 2017 (S.I. 2017/1164), reg. 1(2)(3), Sch. 3 para. 3(a) (with reg. 2(6)(7))

F2 Words in reg. 10 omitted (with effect in accordance with reg. 2(5)(b) of the amending S.I.) by virtue of The Statutory Auditors Regulations 2017 (S.I. 2017/1164), reg. 1(2)(3), Sch. 3 para. 3(b)(i) (with reg. 2(6)(7))

F3 Words in reg. 10 substituted (with effect in accordance with reg. 2(5)(b) of the amending S.I.) by The Statutory Auditors Regulations 2017 (S.I. 2017/1164), reg. 1(2)(3), Sch. 3 para. 3(b)(ii) (with reg. 2(6)(7))

F4 Words in reg. 10 inserted (with effect in accordance with reg. 2(5)(b) of the amending S.I.) by The Statutory Auditors Regulations 2017 (S.I. 2017/1164), reg. 1(2)(3), Sch. 3 para. 3(b)(iii) (with reg. 2(6)(7))

F5 Words in reg. 10 omitted (with effect in accordance with reg. 2(5)(b) of the amending S.I.) by virtue of The Statutory Auditors Regulations 2017 (S.I. 2017/1164), reg. 1(2)(3), Sch. 3 para. 3(b)(iv) (with reg. 2(6)(7))

F6 Words in reg. 10 substituted (with effect in accordance with reg. 2(2)-(5) of the amending S.I.) by The Limited Liability Partnerships, Partnerships and Groups (Accounts and Audit) Regulations 2016 (S.I. 2016/575), regs. 2(1), 9(2)(a)

F7 Words in reg. 10 substituted (with effect in accordance with reg. 2(2)-(5) of the amending S.I.) by The Limited Liability Partnerships, Partnerships and Groups (Accounts and Audit) Regulations 2016 (S.I. 2016/575), regs. 2(1), 9(2)(b)

F8 Words in reg. 10 inserted (with effect in accordance with reg. 2(2)-(5) of the amending S.I.) by The Limited Liability Partnerships, Partnerships and Groups (Accounts and Audit) Regulations 2016 (S.I. 2016/575), regs. 2(1), 9(2)(c)

F9 Words in reg. 10 substituted (with effect in accordance with reg. 2(2)-(5) of the amending S.I.) by The Limited Liability Partnerships, Partnerships and Groups (Accounts and Audit) Regulations 2016 (S.I. 2016/575), regs. 2(1), 9(2)(d)

F10 Words in reg. 10 inserted (with effect in accordance with reg. 2(2)-(5) of the amending S.I.) by The Limited Liability Partnerships, Partnerships and Groups (Accounts and Audit) Regulations 2016 (S.I. 2016/575), regs. 2(1), 9(2)(e)

F11 Words in reg. 10 substituted (with effect in accordance with reg. 2(2)-(5) of the amending S.I.) by The Limited Liability Partnerships, Partnerships and Groups (Accounts and Audit) Regulations 2016 (S.I. 2016/575), regs. 2(1), 9(2)(f)

F12 Words in reg. 10 omitted (with effect in accordance with reg. 2(2)-(5) of the amending S.I.) by virtue of The Limited Liability Partnerships, Partnerships and Groups (Accounts and Audit) Regulations 2016 (S.I. 2016/575), regs. 2(1), 9(2)(g)

F13 Words in reg. 10 substituted (with effect in accordance with reg. 2(2)-(5) of the amending S.I.) by The Limited Liability Partnerships, Partnerships and Groups (Accounts and Audit) Regulations 2016 (S.I. 2016/575), regs. 2(1), 9(3)(a)

F14 Words in reg. 10 substituted (with effect in accordance with reg. 2(2)-(5) of the amending S.I.) by The Limited Liability Partnerships, Partnerships and Groups (Accounts and Audit) Regulations 2016 (S.I. 2016/575), regs. 2(1), 9(3)(b)

F15 Words in reg. 10 substituted (with effect in accordance with reg. 2(2)-(5) of the amending S.I.) by The Limited Liability Partnerships, Partnerships and Groups (Accounts and Audit) Regulations 2016 (S.I. 2016/575), regs. 2(1), 9(3)(c)

F16 Words in reg. 10 inserted (with effect in accordance with reg. 2(2)-(5) of the amending S.I.) by The Limited Liability Partnerships, Partnerships and Groups (Accounts and Audit) Regulations 2016 (S.I. 2016/575), regs. 2(1), 9(3)(d)

F17 Words in reg. 10 substituted (with effect in accordance with reg. 2(2)-(5) of the amending S.I.) by The Limited Liability Partnerships, Partnerships and Groups (Accounts and Audit) Regulations 2016 (S.I. 2016/575), regs. 2(1), 9(3)(e)

F18 Words in reg. 10 omitted (with effect in accordance with reg. 2(2)-(5) of the amending S.I.) by virtue of The Limited Liability Partnerships, Partnerships and Groups (Accounts and Audit) Regulations 2016 (S.I. 2016/575), regs. 2(1), 9(3)(f)

F19 Words in reg. 10 inserted (with application in accordance with reg. 2 of the amending S.I.) by The Companies and Limited Liability Partnerships (Accounts and Audit Exemptions and Change of Accounting Framework) Regulations 2012 (S.I. 2012/2301), regs. 1, 20(9)(a)

F20 Words in reg. 10 inserted (with application in accordance with reg. 2 of the amending S.I.) by The Companies and Limited Liability Partnerships (Accounts and Audit Exemptions and Change of Accounting Framework) Regulations 2012 (S.I. 2012/2301), regs. 1, 20(9)(b)

F21 Words in reg. 10 omitted (with application in accordance with reg. 2 of the amending S.I.) by virtue of The Companies and Limited Liability Partnerships (Accounts and Audit Exemptions and Change of Accounting Framework) Regulations 2012 (S.I. 2012/2301), regs. 1, 20(9)(c)

F22 Words in reg. 10 inserted (with effect in accordance with reg. 2(2)-(5) of the amending S.I.) by The Limited Liability Partnerships, Partnerships and Groups (Accounts and Audit) Regulations 2016 (S.I. 2016/575), regs. 2(1), 9(4)

F23 Words in reg. 10 inserted (with effect in accordance with reg. 2(2)-(5) of the amending S.I.) by The Limited Liability Partnerships, Partnerships and Groups (Accounts and Audit) Regulations 2016 (S.I. 2016/575), regs. 2(1), 9(5)

F24 Words in reg. 10 substituted (with effect in accordance with reg. 2(2)-(5) of the amending S.I.) by The Limited Liability Partnerships, Partnerships and Groups (Accounts and Audit) Regulations 2016 (S.I. 2016/575), regs. 2(1), 9(6)

F25 Words in reg. 10 substituted (with effect in accordance with reg. 2(2)-(5) of the amending S.I.) by The Limited Liability Partnerships, Partnerships and Groups (Accounts and Audit) Regulations 2016 (S.I. 2016/575), regs. 2(1), 9(7)(a)

F26 Words in reg. 10 omitted (with effect in accordance with reg. 2(2)-(5) of the amending S.I.) by virtue of The Limited Liability Partnerships, Partnerships and Groups (Accounts and Audit) Regulations 2016 (S.I. 2016/575), regs. 2(1), 9(7)(b)

Marginal Citations

M1 Section 408 was amended by regulation 10 of S.I. 2008/393.