How to determine the size of a company
There are four sizes of company to consider when preparing and filing accounts and reports in accordance with the Companies Act 2006 (CA 2006) - micro-entity, small, medium-sized and large.
The size of a company is determined by thresholds for turnover, balance sheet total (meaning the total of the fixed and current assets) and the average number of employees. In addition, qualitative factors are taken into consideration. For example, public companies and certain financial services companies cannot qualify as micro-entities, small, or medium-sized companies. There are also restrictions in certain group situations, for example, when a company is part of an ‘ineligible group’.
Small companies and micro-entities
There are special provisions available in CA 2006 for small companies and micro-entities when preparing and filing their annual accounts and reports.
For more information on the criteria for qualifying as a small company visit Small companies regime – are you eligible?
For more information on the criteria for qualifying as a micro-entity visit Micro-entities regime – are you eligible?
For more information on the requirements and simplifications available to small companies and micro-entities, including some practical considerations to help you choose the right financial reporting regime according to your circumstances visit Small and micro-entity reporting – choosing the right regime.
There are also some special provisions available to medium-sized companies when preparing their annual accounts and reports, for example, with regards to the information required in the strategic report and the directors’ report.
For more information on the criteria for qualifying as a medium-sized company visit Medium-sized companies – eligibility criteria.
Any companies that do not meet the criteria to be a micro-entity, or a small or medium-sized company, are large companies and are required to prepare and file full accounts.
Further resources available to Financial Reporting Faculty members:
- For more information on the regulatory requirements affecting UK company accounts access the factsheet UK Regulation for Company Accounts.
- For more information on the simplifications available to small entities and the criteria to be met visit the factsheet Preparing and Filing Small Company Accounts.
- For an overview of FRS 105 The Financial Reporting Standard applicable to the Micro-entities Regime, the criteria for qualifying as a micro-entity, and the exemptions available to such entities, access the factsheet Micro-entity Accounts: Moving to FRS 105.
- For an overview of the UK accounting framework, which accounting standards are applicable, and the options that are available to different types of entity, access the factsheet The UK Financial Reporting Regime.