Approval and Signing of Statutory Financial Statements by Board of Directors

Under the previous legislation, the directors (or two directors on behalf of the board of directors) were required to sign the balance sheet and profit and loss account. The Companies Act 2014 has updated this somewhat in that the wording now states that the directors must not approve the financial statements until they are satisfied that they give a true and fair view and otherwise comply with the Companies Act 2014 (Section 324).

The Act now allows for the signature (in the case of a single director company) or the signatures of the director(s) to be inserted on the face of the balance sheet only with no requirement to have it inserted on the face of the profit and loss account.

Another additional requirement of the Act, one which was mostly applied as best practice, is that every copy of the balance sheet laid before the members in general meeting or which is otherwise circulated, must state the names of the person(s) signing on behalf of the board of directors.

CA 2014 summary of changes – signing statutory financial statements:

• If a company is a single director company, the financial statements need only be signed by that one director
• The director(s) signature(s) need only be inserted on the face of the balance sheet. There is no longer a requirement for the face of the profit and loss account to be signed
• The director(s) name(s) must be stated