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(This note is not part of the Regulations.)
1. These Regulations amend provisions in Part VIII of the Companies (Northern Ireland) Order 1986 (“the 1986 Order”) concerning—
the exemption of certain small companies from the requirement to have their annual accounts audited, and
the conditions a company must satisfy in order to qualify as dormant
The amendments effected by the Regulations will apply to annual accounts and reports in respect of financial years ending on or after 13th June 2001 (regulation 1(2)).
2. Regulation 2 increases the turnover limit in Article 257A(3)(b) of the 1986 Order which a small company other than a small charitable company must not exceed in respect of a financial year if it is to be exempt from audit. The turnover limit is increased from £350,000 to £1 million (for small charitable companies the gross income limit remains at £90,000).
3. Regulation 4(3)(b) increases the turnover limit for a group to qualify as a small group for the purposes of Article 257B(1C) from £350,000 net (£420,000 gross) to £1 million net (£1.2 million gross) (the limit as it applies in relation to small charitable companies remains unchanged). A company which would otherwise be disqualified from claiming exemption from audit under Article 257A for a financial year because it was a parent company or subsidiary undertaking for any period in that year, may nevertheless claim the exemption if it is a member of a small group which satisfies the conditions specified in Article 257B(1C). Regulation 4(3)(a) amends Article 257B(1C)(a) to provide for the exemption from audit for small groups to apply to groups where not all the bodies in the group are companies within the meaning of Article 3 of the 1986 Order.
4. Regulation 3 inserts a new Article 257AA making provision for dormant companies to replace that in Article 258 (which is repealed by regulation 8(6)). Dormant companies as defined will no longer need to pass a special resolution in order to qualify for exemption from audit, but instead will so qualify automatically provided 10 per cent of members do not request an audit. The definition of dormancy has also been amended (see new Article 257AA(4) to (7)).
5. Regulations 5 to 7 impose new requirements for companies which are claiming dormancy status under Article 257AA for a financial year and which have during that year acted as agent for any person to disclose that fact in the notes to their accounts (the amendments are to Schedules 4, 8 and 8A).
6. Regulations 2(3), 4(2), (4) and (5) and 8 make minor and consequential amendments.
7. A Regulatory Impact Assessment of these Regulations is available from the Department of Enterprise, Trade and Investment, Companies Registry, IDB House, 64 Chichester Street, Belfast BT1 4JX. A copy has also been placed in the Assembly Library.
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