Introduction
- 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,
- large.
- The Company size is determined by factors that are set out in CA 2006.
- Certain types of companies are excluded from using certain classification.
- e.g. Public Companies must use the Large company regime.
Quantitative Factors
- There are 3 classifications of company size to consider when preparing your accounts – micro-entity, small, medium or large:
- turnover
- balance sheet total (meaning the total of the fixed and current assets)
- the average number of employees
Micro-Entity
- A micro-entity must meet at least 2 of the following conditions:
- turnover must be not more than £632,000
- the balance sheet total must be not more than £316,000
- the average number of employees must be not more than 10
Small
- For accounting periods beginning on or after 1 January 2016, a small company must meet at least 2 of the following conditions:
- annual turnover must be not more than £10.2 million
- the balance sheet total must be not more than £5.1 million
- the average number of employees must be not more than 50
- For accounting periods beginning before 1 January 2016 the thresholds were:
- annual turnover must be not more than £6.5 million
- the balance sheet total must be not more than £3.26 million
- the average number of employees must be not more than 50
Medium
- To be a medium-sized company, you must meet at least 2 of the following conditions:
- the annual turnover must be no more than £36 million
- the balance sheet total must be no more than £18 million
- the average number of employees must be no more than 250
Large
- Companies that do not meet the above criteria must apply the Large Company regime.
- In addtion, certain types of companies automatically fall in the large company definition:
- a public company
- a company that has permission under Part 4 of the Financial Services and Markets Act 2000 to carry on a regulated activity or that carries on an insurance market activity
- a member of an ineligible group