A medium sized company can prepare accounts according to special provisions applicable to medium sized companies. The benefit of preparing accounts according to medium sized company rules is that company can choose to disclose reduced information in the accounts for public record.
Medium-sized company criteria
Generally, your limited company must meet at least two of the following conditions in order to be eligible to prepare and submit medium sized company accounts.
|Annual sales||Not more than £36 million|
|Balance sheet total||Not more than £18 million|
|Average number of employees||Not more than 250|
Company cannot prepare and submit medium-sized company accounts
Your company cannot be treated as a medium sized company if it is, or was at any time during the financial year, one of the following:
- A public limited company.
- A company that has permission under Part 4 of the Financial Services and Markets Act 2000 to carry on a regulated activity or that carries on an insurance market activity.
- A member of an ineligible group.
On the same note A group is ineligible if any of its members is:
- A public limited company.
- A body corporate (other than a company) whose shares are admitted to trading on a regulated market.
- A person (other than a small company) who has permission under Part 4 of the Financial Services and Markets Act 2000 to carry on a regulated activity.
- A small company that is an authorised insurance company, a banking company, an e-money issuer, a MiFID (ie Markets in Financial Instruments Directive) investment firm or a UCITS (i.e.Undertakings for Collective Investment in Transferable Securities) management company.
- A person who carries on insurance market activity.
Qualifying as a medium-sized company every year
Your company qualify as medium sized company in your first accounting period if you fulfil the conditions in that period. In any subsequent period your company must fulfil the conditions in that period and the period before.
However if your company which qualified as medium sized in one period no longer meets the criteria in the next period, you may continue to claim the exemptions available for the following period. Thereafter if your company then reverts back to being medium sized by meeting the criteria the exemption will continue uninterrupted.
Contents of medium-sized company accounts
In summary your Medium sized company accounts must include:
- Profit and loss account.
- Balance sheet, showing the printed name and signature of a director.
- Disclosure notes to the accounts.
- Group accounts (if appropriate).
- Directors’ report including a business review (or strategic report) showing the printed name of the approving secretary or director.
- Auditor’s report that includes the name of the registered auditor unless the company is exempt from audit.
Your medium-sized company must deliver all of the constituent parts of your company accounts to Companies House.
Medium sized company exemptions
Your medium-sized company may omit certain information from your business review or strategic report in your directors’ report. This includes analysis using key performance indicators so far as they relate to non-financial information.
Medium sized company which is part of an ineligible group can still take advantage of the exemption from disclosing non-financial key performance indicators in your business review or strategic report.
Medium-sized company preparing accounts according to Companies Act may omit disclosure with respect to compliance with accounting standards and also the related party transactions from your company accounts send to their members.
Your company may also choose to deliver a slightly reduced information of the profit and loss account. Please refer to regulation 4 of The Large and Medium sized Companies and Groups Accounts and Reports Regulations 2008 for further information.
Some subsidiary company may be exempt from audit where they meet certain conditions for financial years ending on or after 1 October 2012.
Medium sized groups
There are no special rules for medium sized groups. Your medium sized parent company must prepare group accounts and deliver them to Companies House.
Remember to deliver your company accounts on time to Companies House to avoid late filing penalty.