Private companies: s172(1) statements and dividends
Stephanie Henshaw outlines a structure to help private companies approach their s172(1) statement and Simon Kettlewell highlights ICAEW's guide on paying dividends.
All large companies are now required to include in their strategic report a statement explaining how the directors have complied with their duties under section 172 of the Companies Act 2006 (a s172(1) statement). Listed companies tend to have systems in place for preparing complicated narrative reports. However, private companies without the same resource or experience have found the new statement much more challenging.
The purpose of this article is to suggest a structured approach to make the process easier and the statement itself more effective in communicating the board’s key decisions.