Qualifying subsidiary exemption meaning

The Companies Act 2006 (CA 2006) provides comprehensive rules governing how a company prepares its annual accounts. Through the Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008, SI 2008/1911 (the 2008 Regulations), selected elements are extended to limited liability partnerships (LLPs), with suitable adaptations. The Limited Liability Partnerships, Partnerships and Groups (Accounts and Audit) Regulations 2016, SI 2016/575 (the 2016 Regulations) introduced a range of amendments to the accounting framework for LLPs and qualifying partnerships. Further alterations affecting LLPs and other bodies were made by the Statutory Auditors Regulations 2017, SI 2017/1164. In most cases, the changes take effect for LLPs with financial years commencing on or after 17 June 2016; however, the stricter conditions on the small LLPs’ exemption from preparing group accounts apply to periods starting on or after 1 January 2017. This Practice Note, read alongside Practice Note: LLP Accounts—an outline of the statutory framework, distils the key obligations contained within these statutory provisions...

Where a company produces annual accounts for a financial year, an audit is required unless an audit exemption applies. Qualifying subsidiary exemption from the requirement to audit accounts A subsidiary that meets specific criteria may claim an exemption from auditing its individual accounts for a given financial year. The necessary conditions are: it is a subsidiary undertaking its parent undertaking is constituted under the law of any part of the United Kingdom every member consents to the exemption for the financial year concerned its parent undertaking provides a guarantee for that financial year under section 479C of the Companies Act 2006, namely a statement guaranteeing all of the subsidiary’s outstanding liabilities at the end of the financial year until they are settled in full, which is enforceable against the parent by any person to whom the subsidiary is liable in respect of those liabilities it is included in the consolidated accounts prepared by the parent for that financial year, or to...

The seed enterprise investment scheme (SEIS) The seed enterprise investment scheme (SEIS), alongside the enterprise investment scheme (EIS), aims to stimulate investment backing for smaller, higher-risk trading businesses by granting various tax reliefs to individuals acquiring newly issued shares in the companies concerned themselves. SEIS operates to detailed rules and stipulates multiple conditions that must be satisfied, covering in particular the following areas: the individual investors the shares issued, the funds raised and the overall arrangements in general the issuing company itself This Practice Note concentrates on the requirements applicable to the issuing company and any group to which it belongs (if there is one). However, the issuer must also carefully consider all the other SEIS conditions set out in the additional Practice Notes mentioned below in full. These requirements are framed by reference to SEIS income tax relief as provided for in Part 5A of the Income Tax Act 2007 (ITA 2007). Capital gains tax (CGT) relief—whether via...