(2) If a company makes an election under paragraph (1), the election shall, subject
to the provisions of these Regulations have effect in respect of the financial statements for the
financial year in which the election is made and subsequent financial years.
(3) For a period which is a company’s financial year but which does not consist of
a continuous consecutive period of one full calendar year the maximum figure in regulation
3(2) in respect of turnover shall be proportionately adjusted.
(4) Where an election by a company is in force in respect of a financial year, the
provisions of the Companies Act 1982
f
set out below shall, in respect of that year, have effect
in relation to the company subject to the following adaptations and modifications-
section 9(1)- omit the words “, and the auditors’ report shall be attached
thereto”;
section 9(3)- omit the words “or without having attached thereto a copy of
the auditors’ report,”;
section 11(1)- omit the words “, together with a copy of the auditors’ report,”;
section 11(4)- omit the words “, together with the auditors’ report on the
balance sheet”;
section 12 to 15- omit the sections.
(5) Where an election is made, the copies of the financial statements sent out to
every member of the company in accordance with section 11(1) of the Companies Act 1982
shall be accompanied by a notice informing him of the fact that the financial statements have
not been audited and of his rights under regulation 6.
(6) If default is made in complying with paragraph (5) the company and every
officer of the company who is in default shall be guilty of an offence and shall be liable to a
default fine.
(7) Notwithstanding this regulation, an election under paragraph (1) shall not be
treated as having effect in respect of any financial year if, at any time in that year, the
company is not an audit exempt company.
Groups of Companies
5. (1) A company which is a member of a group which is required to prepare
consolidated group accounts under Section 4 of the Isle of Man Companies Act 1982 or
would be so required save for the provisions of Section 4(2)(a) or (b) of such Act may only
elect to become an audit exempt company provided the group in aggregate satisfies the
conditions set out in regulation 3(2).
(2) Where during a financial year a company joins or leaves a group which is
required to prepare consolidated group accounts under Section 4 of the Companies Act 1982
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1982 c.2