by Nick Robinson | Mar 21, 2013 | Accounting, Company Formation
So what is an annual return?
An annual return is a snapshot of important company information that details the founding, type, financial markers, directors, registered numbers, and more important information about a company so that the government and customers can understand and follow the legitimacy of an organization. It should be noted that an annual return is fully separate from a company’s annual financial accounts and statements, and those documents will contain different information.
In an annual return, information that must be contained includes: the name of the company, the legal return date, the registration number, the principal business activities of the company (i.e., how and why it operates), the type of company (whether it is a public or private entity), and the registered office address in order for the government to fill out its records.
Additionally, the annual return must include an alternate inspection location for where the company keeps records, if it is not entirely at the listed company office, as well as the contact and information details of the company secretary where applicable, and the details of all of the company’s directors, whether corporations or individuals (or both).
Additionally, if the company is publicly traded or has shares of some sort that hold value, the annual return must include additional information, like: a statement of capital, a marker to indicated whether the company was considered a ‘traded company’ at any point during the return period, whether it is traded on a regulated market, details of the shareholders, and which markets and where the company’s shares were traded during the relevant period for the annual return.
The annual return provides a snapshot so that the government may better come to know businesses and how they operate. It promotes easy and straightforward regulation, so the government can keep track of businesses behaving illegally, while allowing those businesses who remain within the confines of the law to work and make money freely.
Annual returns are important to ensure that businesses operate properly and ethically, both in the interests of their shareholders, directors, and employees, and in the interests of the greater good of the public, where applicable.
As the name suggest, annual returns are filed every year and are updated to provide any important or significant changes in a company’s profile that need to be known. Periodically, some of the requirements on the annual return change slightly, though the basic idea has remained unchanged in the hopes that businesses will be able to file paperwork efficiently and quickly.