Section 148 of the companies Act Cap 486 states:
(1) The directors of every company shall, at some date not later than eighteen months after the incorporation of the company and subsequently once at least in every calendar year, lay before the company in general meeting a profit and loss account or, in the case of a company not trading for profit, an income and expenditure account for the period, in the case of the first account, since the incorporation of the company, and, in any other case, since the preceding account, made up to a date not earlier than the date of the meeting more than nine months or, in the case of a company carrying on business or having interests abroad, more than twelve months:
Provided that, if the registrar for any special reason thinks fit to do so, he may–
- in the case of any company, extend the period of eighteen months aforesaid, and in the case of any company and with respect to any year, extend the periods of nine and twelve months aforesaid; and
- in the case of any company, permit the account to be laid before the company after the end of the calendar year.
(2) The directors shall cause to be made out in every calendar year, and to be laid before the company in general meeting, a balance sheet as at the date to which the profit and loss account or the income and expenditure account, as the case may be, is made up.
(3) If any person being a director of a company fails to take all reasonable steps to comply with the provisions of this section, he shall, in respect of each offence, be liable to imprisonment for a term not exceeding twelve months or to a fine not exceeding ten thousand shillings or to both:
- in any proceedings against a person in respect of an offence under this section, it shall be a defence to prove that he had reasonable ground to believe and did believe that a competent and reliable person was charged with the duty of seeing that the provisions of this section were complied with and was in a position to discharge that duty; and
- a person shall not be sentenced to imprisonment for such an offence unless, in the opinion of the court, the offence was committed wilfully.
In conclusion, Section 148 of the companies Act Cap 486 states clearly:
- It is the sole responsibility of the directors of the company to prepare financial statements
- It is the sole responsibility of the directors of the company to lay these financial statements during the Annual General Meeting If the directors fail to take necessary actions regarding preparation and laying down these financial statements, then they shall be liable to a fine not exceedingten thousands or a jail term not exceeding twelve months or both