For many years small companies have been able to take advantage of the option to file abbreviated accounts at Companies House, thereby keeping to a minimum the information they put into the public domain about them. All this is about to change!
Effective from accounting periods commencing on or after 1 January 2016 this option is removed from company law. So what filing options will be available to small companies in the future?
Generally speaking, small companies will be required to file the version of the accounts that they prepare for their shareholders. They will, however, still have the option not to file the profit and loss account and/or the directors’ report at Companies House – although this does mean that more of the notes to the accounts are likely to have to be filed than at present.
Are there any other options available? Well, yes.
Under the new regulations small companies will have the option of preparing “abridged” accounts for shareholders. These abridged accounts will have less analysis in them of items like fixed assets, debtors and creditors. As these will form the basis for what needs to be filed at Companies House, the preparation of abridged accounts is one way to reduce information that is made publicly available. However, to be able to prepare abridged accounts, the directors will need to obtain approval for this from every shareholder, every year.
Another option available to smaller companies, ie those classed as micro-entities, is the preparation of micro-entity accounts. Micro-entity accounts are rarely seen at the moment, but this is likely to change under these new regulations. This would see companies only filing a simplified balance sheet and a couple of limited notes to the accounts. To qualify as a micro-entity, companies need to satisfy 2 of the following 3 criteria:
Turnover < £632,000
Balance sheet total < £316,000
Average employees 10 or less
For further information on these impending changes, do speak with your regular Thomas Westcott contact.
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