What are the basics of company administration?

Over the past couple of weeks we’ve covered understanding companies and had a look at who the directors of a company are. In this blog post, we’ll cover some of the basic administrative tasks that directors are responsible for and that shouldn’t be overlooked.

A trading company in the Isle of Man is likely to rely on professionals such as the company’s accountants for dealing with company administration. But you may have a small private company and want to deal with as much as possible yourself – or you may just want to be sure that things are being done properly for you.

Registered office

Every company has to have a registered office where the registers are held and can be inspected. If there is any change in the registered office, make sure you give notice to the Companies Registry within one month of the change.

Directors and secretaries

Members of the company and of the public are entitled to know who the directors and secretaries of a company are.

For 1931 Act companies, if there is a change in any of these positions, you’ll need to change the details in the register held at the registered office and send the necessary forms to the Companies Registry within a month of the change.

For 2006 Act companies, any changes are now recorded on the annual return.

Registering charges

This is one of particular importance for lenders to a company; if they are given security over company property, particulars of the charge have to be entered into a register at the registered office and recorded in the Companies Registry, otherwise the security will not be enforceable.

Annual return

The annual return is a ‘snapshot’ of the company at a specific date, usually the anniversary of incorporation. This must be filed at the Companies Registry within one month of the anniversary.

All these forms are available for download on the Isle of Man Government website.

Company accounts

Unless it elects to dispense with the requirement, every 1931 Act company is obliged to prepare annual accounts and lay these before the general meeting. The accounts consist of:

  • Profit and loss account (or income and expenditure if not trading)
  • Balance sheet
  • Directors report

These accounts must be audited unless the company is audit exempt; a company can resolve for its accounts to be exempt from audit if two of the following conditions apply:

  • Its annual turnover is under £5.6 million
  • Its balance sheet total is under £2.8 million
  • It employs no more than 50 persons
  • All the shareholders of the company are directors and it exists wholly for the purpose of holding shares, securities, other investments or land

A resolution to be exempt from audit has to be passed by 100 percent of the members of the company.

Next time, we’ll explain what happens when a company dies in the last blog post of our 4-part company series.

Company administration is an important activity to get right first time. If you’re involved in company administration and would like to ensure your admin is in line with regulation, get in touch with our business team by calling 01624 665522 or emailing hello@quinnlegal.im

Alternatively, you can make a free enquiry here.