Q&As

How does the micro-entities regime compare with the small companies regime in relation to accounting and audit?

Published by a LexisNexis Corporate expert

Published on: 28 January 2020

A company that qualifies for the small companies regime will be subject to less onerous accounting, reporting and audit obligations than a larger company or a quoted company. For information on qualifying as a small company see Practice Note: The small companies regime.

The micro-entity regime is effectively a sub-set of the small companies regime. To qualify, the entity must satisfy lower size thresholds

For information on how to qualify as a micro-entity see Practice Note: The micro-entities regime.

See also Q&A: What are the maximum size thresholds for micro, small and medium-sized companies in relation to the accounts and reports regulations?.

Accounting requirements compared

Small companies

In summary, the advantages of qualifying as a small company in terms of a reduced accounting and reporting burden include the following:

•
the company may prepare an abridged balance sheet and/or an abridged profit and loss account instead of full accounts, provided that all members consent
•
the abridged balance sheet may benefit from combined line items (eg it need

Jurisdiction(s):

United Kingdom

Key definition:

Small companies regime definition

What does Small companies regime mean?

A company that qualifies for the small companies regime will be subject to less onerous accounting, reporting and audit obligations than a larger company or a quoted company. The small companies regime under CA 2006, Pt 15 applies to a company for a financial year in which the company qualifies as small (see small company), and is not excluded from the small companies regime.

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