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Back to FAQExemptions

Small Companies

Small companies can prepare and file simpler, less detailed accounts than those required by large and medium companies.
The requirements for companies subject to the small companies’ regime are set out in Parts 15 and 16 of the Companies Act 2006. Further information on the detailed format and content of accounts for small companies can be found in the relevant regulations.

The Companies Act 2006 and regulations also set out what the directors’ report of a small company must contain. Such a report does not have to contain a business review or a statement as to the amount that the directors recommend be paid by way of dividend. If the company has taken advantage of the small companies’ exemption in preparing the directors’ report it must contain a statement above the director’s or secretary’s signature to that effect.

Not all small companies are eligible for the above exemptions. Examples where companies must submit audited accounts to Companies House are:

  1. Some flat management companies that would otherwise qualify for exemption may have to prepare audited accounts to comply with the terms of their lease. If in doubt, you should consider seeking professional advice.
  2. a parent company or subsidiary undertaking (unless dormant for the period during which it was a subsidiary) except where:
    • the group qualifies as a small group or would qualify if all the bodies corporate (which includes non-UK incorporated bodies) in the group were companies;
    • the turnover for the whole group is not more than £6.5 million net (or £7.8 million gross); and
      - the group's combined balance sheet total is not more than £3.26 million net (or £3.9 million gross).

For a full list, please refer to Companies House.

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