As a business owner you probably already have a lot on your plate, so it might be welcome news that depending on the size of your company, you could be able to reduce the admin burden and send micro-entity accounts, rather than full accounts, to Companies House.
One of the reporting requirements for a limited company is that it submits accounts to Companies House each year. These documents are prepared after the end of the company’s financial year and show how it performed over the previous accounting period. This is something you simply can’t get out of, whether you’ve made a profit or loss, or even if your company is dormant.
If you qualify as a ‘micro company’ then you may be able to submit a simpler set of accounts instead, called micro-entity accounts. It has the potential to save you a lot of time and stress, because you won’t need to include so many documents, such as director’s reports.
Is this suitable for me?
Submitting micro-entity accounts could be the right choice if your company consists of yourself and a few members of staff, with no shareholders who need to know the ins and outs of your company’s performance.
You’ll still need to send statutory accounts to HMRC as part of your Company Tax Return!
It’s also worth noting that any business can still submit full accounts if they choose to do so, regardless of their size. In some cases it can be a good habit to get into, especially if you plan on expanding.
Can any company submit micro-entity accounts?
Only very small ‘micro’ companies can submit micro-entity accounts, so if you’re a medium sized or larger business, you’ll have to send off a full set of accounts.
How do I know if I qualify as a micro-company?
If your company meets 2 out of 3 of these requirements in the financial year, it will qualify as a micro-entity:
21 months after the date registered with Companies House.
File annual accounts with Companies House
9 months after your company’s financial year has ended.
Are there disadvantages to submitting micro accounts?
They’re so quick and simple to do – and that comes with a price! Because micro-entity accounts contain so little information, it could deter lenders and credit agencies that you’re applying to for funding. This is because there will be less publicly available information about your company, so you might need to include more details as part of your funding application. It also makes it much harder for investors to see your company’s process.
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