Small businesses trading using limited company are eligible to file abbreviated accounts to the Registrar of Companies. The advantage of filing abbreviated accounts is that of it provides less detailed information for public inspections. However, the directors are still obliged to present full accounts to the shareholders.
The Companies Act provides clear definition of small and medium sized company eligibility thresholds.
Small Company Limit
Your company will be regarded as small company if you can satisfy two out of the three criteria below.
Accounting period start or after
|
6 April 2008
|
6 April 2007
|
| Sales is less than |
£6.5 million
|
£5.6 million
|
| Balance sheet total below |
£3.26 million
|
£2.8 million
|
| Employees less than |
50
|
50
|
Medium Sized Company
If your company has exceeded the small company thresholds you may still be able to file abbreviated accounts under Medium sized company requirements.
Accounting period start or after
|
6 April 2008
|
6 April 2007
|
| Sales is less than |
£25.9 million
|
£22.9 million
|
| Balance sheet total below |
£12.9 million
|
£11.4 million
|
| Employees less than |
250
|
250
|
Companies which are regulated by the Financial Services Authority are not allowed to prepare abbreviated accounts for Companies House. These companies include:
- A public listed company (plc)
- A company providing banking facility
- An insurance company
- A subsidiary company or an associated company of a company listed in the Stock Exchange.
Many people got confused with small company definition with company accounts audit requirement. Company accounts are required to be audited as long as sales for the year have exceeded £6.5 million and/or balance sheet total is more than £3.26 million. You must appoint registered auditors to carry out the audit. The auditors will issue auditor’s report certifying your accounts give a true and fair view.
Concise Accountancy offer fixed fee accounting packages for limited companies. These packages are suitable for people starting a business and small companies with less than £110,000 sales per year. The accounting packages are designed to take care of Ltd company’s legal obligations under the company law and also its corporate tax affairs.
Concise Accountancy – providing business solutions for companies
