At end of the financial year, your private limited company must file accounts every year at Companies House. Company accounts are documents prepared at the end of a financial year which show how a company has performed over the accounting period. All limited companies must deliver accounts to Companies House. It does not matter whether you’ve been successful, breaking even, not trading, or dormant.
What accounts am I required to prepare for Companies House?
A full set of accounts will usually consist of:
- A profit and loss account (also known as a statement of income and retained earnings)
- A balance sheet (also known as a statement of financial position)
- Notes
- A director’s report
The accounts require approval by the director before filing.
However, for Companies House purposes, small companies can choose to file “filleted” accounts of the full accounts at Companies House- these are a simplified version of the accounts and you do not need to send a director’s report or a profit and loss account. Accounts are prepared in line with Section 1A of Financial Reporting Standard 102, comprising both mandatory and encouraged disclosures.
A company is deemed to be “small” if it has any 2 of the following:
- Your turnover is less than £10.2 million
- Your balance sheet is less than £5.1 million
- You have fewer than 50 employees
If you’re a very small company, you may be able to file even simpler statutory micro-entity accounts. These are filed under Financial Reporting Standard 105. You fall into the micro-entity category if you meet two of these requirements:
- A turnover of £632,000 or less
- £316,000 or less on your balance sheet
- 10 employees or less
Micro-entity accounts are very simple accounts- in this respect, you only need to file a balance sheet with foot notes to Companies House.
The downside of preparing micro-entity accounts is that it provides very limited information.
Also, a mix and match option isn’t available where you can prepare full accounts under Section 1A of FRS 102 – you can’t decide to submit the Companies House set under FRS 105 (Micro-entities regime) to benefit from the much reduced disclosure.