Small companies and micro-entities do not need to submit full company year-end accounts to Companies House.
Under government rules, small companies can file abridged accounts. These are less detailed than full accounts.
However, micro-entities can take things a step further, filing micro-entity accounts that are lighter again in terms of detail.
What are Abridged Accounts?
An abridged set of accounts includes:
- Balance sheet
- Profit and loss account
They don’t include a director’s report or detailed supporting notes. If a small company is exempt from auditing, it will not need an auditor’s report.
The balance sheet and profit and loss entries contain subsets of information included in full annual accounts.
What are Micro-Entity Accounts?
Micro-entity accounts must also meet the statutory minimum requirement but they comprise a shortened balance sheet and profit and loss account.
They do not need to include a director’s report.
Providing the micro-entity is exempt from being audited, nor will it need to include an auditor’s report.
Micro Entity Accounts vs Abridged
Which type of accounts you file with Companies house will depend on whether your business qualifies as a small company or a micro-entity.
To qualify as a small company, you must meet at least two out of these three criteria:
- Annual turnover of £10.2 million or less
- Balance sheet total of £5.1 million or less.
- No more than 50 employees
If you wish your business to qualify as a micro-entity, it must meet at least two of these criteria:
- Annual turnover of £632,000 or less
- Balance sheet total of £316,00 or less
- No more than 10 employees
Both abridged and micro-entity accounts are still statutory. Whatever type of company you’re classified as you must still file your annual accounts with Companies House.
What Options Do I Have?
A company has a legal duty to file its annual accounts with Companies House and submit its accounts to shareholders.
However, if you meet the criteria for a small company, you can file abridged versions of your accounts.
In fact, you only need to file your balance with Companies House, but you will need to give shareholders access to your profit and loss account.
If you meet the criteria for a micro-entity, you can submit shortened micro entity accounts. You must file your balance sheet with Companies House but you require neither a profit and loss account nor a director’s report.