Company Formation Specialists

Other Very Small Company Audit Exemption Questions

Does an audit exempt company still have to send accounts to its members?

Every company must send a copy of its annual accounts for each financial year to -

• every member of the company;
• every holder of the company's debentures; and
• every person who is entitled to receive notice of general meetings.

What Are The Possible drawbacks of unaudited accounts?

Banks and credit managers rely on information available from Companies House to assess a company's creditworthiness and currently look for the reassurance of an independent audit. If it qualifies for audit exemption, a company will need to decide whether unaudited accounts are appropriate to its own circumstances.

Are annual accounts required if a company is not trading?

All limited companies, whether they trade or not, must deliver accounts to Companies House. However, a limited company may claim exemption from audit as a 'dormant company' if it has not traded during a financial year, and provided it meets certain other criteria.

Dormant companies do not need to appoint auditors and can deliver even simpler annual accounts to Companies House via the form AA02.

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