Back dating invoices
For example, there may have been a transfer of trade from one group company to another on a particular date.
For example, a reduction of share capital using the UK solvency statement procedure only takes effect in law when it is actually registered with Companies House.This type of arrangement would not bind third parties, but it may be effective from an accounting and tax perspective depending on the length of time which has elapsed since the intended historic effective date.The same considerations as regards legal and other due diligence would apply so as to manage the risk of any unintended liabilities being triggered, and to make sure that the legal transfer of the relevant assets is completed.Since so many people think this is an important point, I thought I’d do a post addressing just that contention. What I assume people mean is that granting in-the-money options is not illegal, so long as you account for it properly. But the whole point of backdating is to pretend that you’re not granting in-the-money options when in fact you are.
And to say it’s up to the bean-counters to catch this situation is silly, because the whole reason you’re using phony dates is so that the bean-counters won’t know what you really did.
These two general areas mean that some legal due diligence should be carried out to identify and address areas for corrective action.