Part 15Accounts and reports

Chapter 1Introduction

Companies subject to the small companies regime

382Companies 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.

F1(1A)

Subject to subsection (2), a company qualifies as small in relation to a subsequent financial year if the qualifying conditions are met in that year.

F2(2)

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.

(3)

The qualifying conditions are met by a company in a year in which it satisfies two or more of the following requirements—

1. Turnover

F3Not more than £10.2 million

2. Balance sheet total

F4Not more than £5.1 million

3. Number of employees

Not more than 50

(4)

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.

(5)

The balance sheet total means the aggregate of the amounts shown as assets in the company's balance sheet.

(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 383 (companies qualifying as small: parent companies).