As a Director/Shareholder, Do I Have to Sign Company Accounts?

A company’s annual accounts must be approved by the board of Directors and signed on behalf of the board by a Director of the company. The Director’s signature must be on the company’s balance sheet. If the accounts are prepared in accordance with the small companies regime, the balance sheet must contain, in a prominent position above the signature a statement that the accounts have been prepared in accordance with the micro-entity provisions, or in the case of accounts not prepared as above, a statement to the effect that the accounts have been prepared in accordance with the provisions applicable to companies subject to the small companies regime, (Section 414 Companies Act 2006).

If you are not being provided with sufficient information to have confidence in the content of the accounts, this may amount to a breach of s.423 (in the case of a Shareholder), s.388 (in the case of a Director), the articles of association and/or any Directors service agreement. If you are a Director/Shareholder and the reason you are not prepared to sign the accounts is because you consider another Shareholder has treated you unfairly, prejudicially, and/or because you consider they have acted unlawfully, in the alternative to refusing to sign the accounts you may be well placed to consider pursuing an unfair prejudice petition.