CH11400 - Record Keeping: What records must be kept: Company records

Company law specifies the accounting records that a company must keep. If a company complies with these requirements, it is highly likely that it will also comply with the requirements of tax law.

Every company must keep adequate accounting records. These are records that are sufficient

  • to show and explain the company’s transactions, and
  • to enable the directors to ensure that any accounts that must be prepared comply with the requirements of the Companies Act 2006.

In particular, accounting records must contain

  • entries from day to day of all sums of money received and expended by the company and the matters in respect of which the receipt and expenditure takes place, and
  • a record of the assets and liabilities of the company.

If the company’s business involves dealing in goods, the accounting records must contain

  • statements of stock held by the company at the end of each financial year of the company,
  • all statements of stocktaking’s from which any statement of stock has been or is to be prepared, and
  • except in the case of goods sold by way of ordinary retail trade, statements of all goods sold and purchased, showing the goods and the buyers and sellers in sufficient detail to enable all these to be identified.

A parent company that has a subsidiary undertaking in relation to which the above requirements do not apply must take reasonable steps to secure that the undertaking keeps such accounting records as to enable the directors of the parent company to ensure that any accounts required to be prepared comply with the requirements of the Companies Act. You can find a definition of ‘parent’ and ‘subsidiary undertaking’ in CH23800.

Companies Act 2006/S386

Companies Act 2006/S1162