207I Companies with 10 or more shareholders may opt out


This section applies to a company with 10 or more shareholders.


However, this section does not apply—


if the constitution of the company expressly provides that this section does not apply; or


if the company is a large company or a public entity.


The shareholders of the company may, at a meeting of shareholders held within the opting period, opt out of compliance with 1 or more of the following provisions in relation to the accounting period by way of a resolution approved by not less than 95% of the votes of those shareholders entitled to vote and voting on the question:


sections 201 and 202 (preparation of financial statements and group financial statements):


section 207 (audit requirement):


section 208 (obligation to prepare annual report).


If the shareholders opt out of compliance with a provision in relation to an accounting period under this section, the provision does not apply to the company in relation to that period.


ABC Limited has an accounting period of 1 April 2014 to 31 March 2015.

ABC Limited is not a large company in relation to that period (see section 45 of the Financial Reporting Act 2013).

Under section 199, it has 15 shareholders.

The opting period ends no later than the close of the date of the annual meeting to be held in that period. At the annual meeting, a resolution to opt out of the preparation provisions (sections 201 and 202) is passed by a 95% majority. Accordingly, ABC Limited does not have to prepare financial statements for that period (section 207, which relates to auditing, also does not apply because financial statements are not required to be prepared).

Section 207I: inserted, on 1 April 2014, by section 30 of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).