Your limited company may be eligible to prepare a micro entity accounts if your company meet the criteria of a micro entity.
To qualify as a micro entity, your limited company must meet at least two of the following conditions:
- turnover must not exceed £632,000
- the balance sheet total must not exceed £316,000
- the average number of employees must not be more than 10
Limited company cannot prepare and submit micro-entity accounts
Your company cannot prepare and submit micro-entity accounts if it is, or was at any time during your financial year, one of the following;
- A limited partnership
- A qualifying partnership as defined under the Partnership (Accounts) Regulations 2008
- A public limited company
- An overseas company
- An unregistered company
- A company authorised to register under section 1040 Companies Act 2006
- A charitable company
- A company that is excluded from the small company’s regime under section 384 Companies Act 2006, or is excluded from being treated as a micro-entity under section 384B Companies Act 2006.
Generally, your company qualify to submit a micro-entity accounts in your first financial year if you fulfil the micro entity conditions in that year. In any subsequent years a company must fulfil the conditions in that year and the previous year.
However, if your company which qualified as a micro-entity in one year no longer meets the criteria in the next year, it may continue to claim the exemptions available in the next year.
If your company then reverts back to being a micro-entity by meeting the criteria in the following year, the exemption will continue uninterrupted.
Contents of micro-entity accounts
Your company’s micro entity accounts must include the following:
- A balance sheet that complies with one of the specified formats given in the relevant regulations, along with any footnotes
- A directors’ report
- A profit & loss account that complies with the specified format given in the relevant regulations
- An auditors report, unless the company is claiming exemption from audit as a small company
- Any notes to the accounts
The balance sheet must contain a statement in a prominent position above the director’s signature and printed name that your accounts have been prepared in accordance with the micro-entity provisions. This statement should appear in the original accounts as well as the copy sent to Companies House.
Your company do not have to deliver a copy of the directors’ report or the profit and loss account to Companies House. You only submit a balance sheet with reduced set of information with Companies House.
Your company may be able to claim audit exemption as a small company.