Small company accounts and Companies House
At the end of every financial year, Panthera submits your company’s accounts to Companies House and, as with all limited firms, your records become public record.
There are two types of accounts that cover small businesses. In this article, we look at both types and the differences between them.
Micro-entity company accounts
We’ll file micro-entity company accounts for your company if two or more of the following three describe your business:
• your turnover less than £632,000
• your balance sheet is shows less than £316,000 in net assets
• your average employee number throughout the accounting period was never more than ten
If this is you, we prepare a balance sheet with much less information on it than every other type of company. There’s no need to file a directors’ report. In addition, you don’t have to show any profit or loss figures.
In your first year of trading, you’ll be classed as a micro-entity unless, during that year, you no longer meet two of the three criteria laid out. Going forward, you will be classed as a micro-entity only if you met two of the three conditions in that accounting period and the year beforehand.
If your business was classed as a micro-entity in one financial year but in the following year did not qualify, you’re still allowed to submit micro-entity accounts the following year. If, in the year after that, you qualify again as a micro-entity, you can carry on filing as a micro-entity.
When we prepare your micro-entity company accounts
The version we give you to keep is a lot different from the one we send to Companies House.
We’ll prepare a compliant balance sheet (with a statement of compliance which will need your signature), a directors’ report (which is another statement of compliance with financial and accounting standards), a compliant profit and loss, and notes to the account.
There is also the provision to file an auditors’ report but we’ll more likely than not claim exemption from that for you.
Which types of companies can’t file micro-entity accounts?
Limited partnerships, public limited companies, overseas companies, sole traders, partnerships, and companies set up for a charitable purpose.
Small company accounts
For small companies, two of the three following criteria need to be met:
• your turnover is no greater than £10.2 million
• your balance sheet must not show more than £5.1m in assets
• during the accounting period, you must not have employed, on average, 51 or more staff.
For small companies, we’ll prepare for you a profit and loss account, a balance sheet (which you or one of your fellow directors must sign on behalf of all the directors), notes to the account, and a directors’ report.
If you meet two of the conditions above, we won’t need to audit your accounts.
What we deliver to Companies House is different. We sent them abridged accounts, assuming that you and all of your fellow directors agree.
With abridged accounts, we don’t need to include certain items on your profit and loss account and we don’t need to provide a split of debtors and creditors. Most of our clients prefer this as they consider it sensitive financial information that they don’t want their competitors to know about. We also don’t have to provide itemised analysis of trade debtors, other debtors and any prepayments.
I have a group of small companies. Can they qualify for small company accounts?
For small companies, you can file them under the small company umbrella if the turnover, level of assets, and average employee number matches the requirements for small company accounts.
Small company accounts – talk to Panthera
Looking for advice? Please call Panthera on 01235 768 561 or email the team at enquiries@pantheraaccounting.co.uk.