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You might have heard of a directors report, but what exactly is it and why does it matter?
A directors report is a document that gives shareholders a peek into your company. It covers your activities over the last year, any challenges faced, and your plans for the future.
While it’s a requirement for some companies, not everyone needs to file one. Let’s dive into what a directors report is and who needs to prepare and file it.
First things first, who’s responsible for this report? If you’re a company director, it’s your job to put this report together each year.
According to the Companies Act 2006, this is a legal requirement that helps to make sure companies stay transparent and accountable.
Not every company needs to file a directors report. Small companies, also known as micro-entities, are often exempt. Your company is considered a micro-entity if it meets at least two of the following criteria:
If you don’t meet at least two of these, you’ll need to file a directors report annually.
Essentially, it keeps everyone in the loop. Especially shareholders who want to know how their investment is doing. It outlines your financial position, how you’re doing compared to competitors, and your plans for the future.
Let’s take a closer look at what’s included.
Your directors report should start with:
The rest of the report will vary depending on the company, but it usually includes:
Just a little reminder: You’ll need to back your report up with financial information and KPIs (key performance indicators).
Our accredited accountants can help! Book a 1-1 tax consultations session to get professional advice on how to get started on your directors report – or whether you need one at all! Don’t leave it to chance!
A directors report isn’t just a legal requirement. It can actually be really useful when it comes to communication, transparency, and planning. A directors report can help you to:
You can file a directors report yourself, but most companies prefer an accountant to handle it. An accountant can ensure you’re compliant and have all the information needed.
Get professional advice about your directors report from an accredited accountant through our tax advice service. 30 minutes, 1-1 and for a fixed price. All the help you’ll need right at your fingertips. Learn more.
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