Subsidiary

A subsidiary company has different financial reporting requirements under the UK company law. A company is a subsidiary of its holding company if either or combination of the following relationship exists.

• The holding company holds a majority of the shareholders' voting rights in the subsidiary
• The holding company is a member of the subsidiary and has the right to appoint or remove directors holding a majority of voting right at meetings of its board of directors.
• The holding company has the right to exercise a dominant influence over the subsidiary by virtue of provisions in the subsidiary’s Memorandum or Articles or by a control contract.
• The parent company is a member of the subsidiary and controls alone, pursuant to an agreement with other shareholders and members, a majority of the voting rights in the subsidiary.
• The holding company exercises a dominant influence over, has the power to exercise a dominant influence over, or is managed on a unified basis with, the subsidiary.
• A company may also be a subsidiary of another, through an intermediate parent company.

A subsidiary company of which it is also a parent company to other subsidiaries may be required to prepare group accounts and consolidated profit and loss accounts if assets and turnover exceeded the group accounts preparation exemption threshold.

A subsidiary company which is part of group of companies listed in the Stock Exchange is not eligible to file abbreviated accounts even though it meets the small and medium sized company criteria. In this circumstance full accounts are to be filed with the Registrar of Companies.

Concise Accountancy provides accountancy services to limited companies. You are welcome to contact our accountants should you require assistance in preparing your UK subsidiary company accounts.

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