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).