Section 394 states that the directors of every company must prepare accounts for the company for each of its financial years and those accounts are referred to as the companyʼs ‘individual accounts’.

Section 394A contains an exemption from the requirement to prepare and file individual accounts applicable to certain dormant companies that are subsidiary companies. The use of this exemption is subject to a number of conditions, primarily the requirement for the parent company, which must be registered in the EEA, to guarantee the liabilities of the dormant subsidiary company until they are settled or expire.