• General

    • 367. Scheme Of This Part

      (1) The requirements of this Part as to accounts and reports apply in relation to each financial year of a company.
      (2) In certain respects different provisions apply to different kinds of company.
      (3) The main distinction for this purpose is between companies subject to the small companies regime (see section 368 (companies subject to the small companies regime)) and companies that are not subject to that regime.
      (4) In this Part, where provisions do not apply to all kinds of company–
      (a) provisions applying to companies subject to the small companies regime appear before the provisions applying to other companies, and
      (b) provisions applying to private companies appear before the provisions applying to public companies.
      (5) Restricted scope companies shall be subject only to the following Chapters of this Part:
      (a) Chapter 2 (Accounting records),
      (b) Chapter 3 (A company’s financial year),
      (c) Chapter 4 (Annual accounts),
      (d) Chapter 6 (Publication of accounts and reports),
      (e) Chapter 8 (Filing of accounts and reports), to the extent required under section 415(3) (duty to file reports and accounts with the Registrar),
      (f) Chapter 9 (Revision of defective accounts and reports), and
      (g) Chapter 11 (Supplementary provisions).

    • 368. Companies Subject To The Small Companies Regime

      The small companies regime applies to a company for a financial year in relation to which the company–
      (a) qualifies as small (see sections 369 (general) and 370 (parent companies)), and
      (b) is not excluded from the regime (see section 371 (companies excluded from the small companies regime)).

    • 369. Companies Qualifying As Small: General

      (1) A company qualifies as small in relation to its first financial year if the qualifying conditions are met in that year.
      (2) Subject to subsection (3), a company qualifies as small in relation to a subsequent financial year if the qualifying conditions are met in that year.
      (3) In relation to a subsequent financial year, where on its balance sheet date a company meets or ceases to meet the qualifying conditions, that affects its qualification as a small company only if it occurs in two consecutive financial years.
      (4) The qualifying conditions are met by a company in a year in which it satisfies both of the following requirements–
      1. Turnover
       
      Not more than 13.5 million US dollars
       
      2. Number of employees Not more than 35
      (5) For a period that is a company’s financial year but not in fact a year the maximum figures for turnover must be proportionately adjusted.
      (6) The number of employees means the average number of persons employed by the company in the year, determined as follows–
      (a) find for each month in the financial year the number of persons employed under contracts of service by the company in that month (whether throughout the month or not),
      (b) add together the monthly totals, and
      (c) divide by the number of months in the financial year.
      (7) This section is subject to section 370 (companies qualifying as small: parent companies).

    • 370. Companies Qualifying As Small: Parent Companies

      (1) A parent company qualifies as a small company in relation to a financial year only if the group headed by it qualifies as a small group.
      (2) A group qualifies as small in relation to the parent company’s first financial year if the qualifying conditions are met in that year.
      (3) Subject to subsection (4), a group qualifies as small in relation to a subsequent financial year of the parent company if the qualifying conditions are met in that year.
      (4) In relation to a subsequent financial year of the parent company, where on the parent company’s balance sheet date the group meets or ceases to meet the qualifying conditions, that affects the group’s qualification as a small group only if it occurs in two consecutive financial years.
      (5) The qualifying conditions are met by a group in a year in which it satisfies both of the following requirements–
      1. Aggregate turnover
       
      Not more than 13.5 million US dollars net (or 16.2 million US dollars gross)
       
      2. Aggregate number of employee Not more than 35
      (6) The aggregate figures are ascertained by aggregating the relevant figures determined in accordance with section 369 (companies qualifying as small: general) for each member of the group.
      (7) In relation to the aggregate figures for turnover–
      “net” means after any set offs and other adjustments made to eliminate group transactions in accordance with international accounting standards, and
      “gross” means without those set offs and other adjustments.
      A company may satisfy any relevant requirement on the basis of either the net or the gross figure.
      (8) The figures for each subsidiary undertaking shall be those included in its individual accounts for the relevant financial year, that is–
      (a) if its financial year ends with that of the parent company, that financial year, and
      (b) if not, its financial year ending last before the end of the financial year of the parent company.
      If those figures cannot be obtained without disproportionate expense or undue delay, the latest available figures shall be taken.

    • 371. Companies Excluded From The Small Companies Regime

      (1) The small companies regime does not apply to a company that is, or was at any time within the financial year to which the accounts relate–
      (a) a public interest entity,
      (b) a financial institution other than a FinTech Participant, or
      (c) a member of an ineligible group other than a FinTech Participant.
      (2) A group is ineligible if any of its members is–
      (a) a public interest entity, or
      (b) a financial institution other than a FinTech Participant.

    • 372. Public Interest Entities And Financial Institutions

      (1) For the purposes of this Part a company is a public interest entity in relation to a financial year if it is a public interest entity immediately before the end of the accounting reference period by reference to which that financial year was determined.
      (2) A “public-interest entity” means a company:
      (a) that is listed on a recognised investment exchange, or
      (b) that is designated by the Board as a public-interest entity, because of the nature of its business, its size or the number of its employees.
      (3) For the purposes of this Part a company is a “financial institution” in relation to a financial year if it was a financial institution at any time during the accounting reference period by reference to which that financial year was determined.
      (4) The Board may make rules amending or replacing the provisions of subsections (1) to (3) so as to limit or extend the application of some or all of the provisions of this Part that refer to public interest entities and/or financial institutions.

    • 373. Companies Qualifying As Micro-Entities

      (1) A company qualifies as a micro-entity in relation to its first financial year if the qualifying conditions are met in that year.
      (2) Subject to subsection (3), a company qualifies as a micro-entity in relation to a subsequent financial year if the qualifying conditions are met in that year.
      (3) In relation to a subsequent financial year, where on its balance sheet date a company meets or ceases to meet the qualifying conditions, that affects its qualification as a micro-entity only if it occurs in two consecutive financial years.
      (4) The qualifying conditions are met by a company in a year in which it satisfies both of the following requirements–
      1. Turnover
       
      not more than 2.5 million US dollars
       
      2. Number of employees not more than 9
      (5) For a period that is a company’s financial year but not in fact a year the maximum figures for turnover must be proportionately adjusted.
      (6) The number of employees means the average number of persons employed by the company in the year, determined as follows–
      (a) find for each month in the financial year the number of persons employed under contracts of service by the company in that month (whether throughout the month or not),
      (b) add together the monthly totals, and
      (c) divide by the number of months in the financial year.
      (7) In the case of a company which is a parent company, the company qualifies as a micro-entity in relation to a financial year only if–
      (a) the company qualifies as a micro-entity in relation to that year, as determined by subsections (1) to (7), and
      (b) the group headed by the company qualifies as a small group, as determined by section 369(2) to (6).

    • 374. Companies Excluded From Being Treated As Micro-Entities

      (1) The micro-entity provisions do not apply in relation to a company’s accounts for a particular financial year if the company was at any time within that year a company excluded from the small companies regime by virtue of section 371 (companies excluded from the small companies regime).
      (2) The micro-entity provisions also do not apply in relation to a company’s accounts for a financial year if –
      (a) the company is a parent company which prepares group accounts for that year as permitted by section 388 (option to prepare group accounts), or
      (b) the company is not a parent company but its accounts are included in consolidated group accounts for that year.