Small and medium-sized companies and limited liability partnerships (LLPs) can benefit from relaxation of the general requirement to supply full, audited accounts once a year to Companies House.

In many cases they can prepare and file shortened versions of their accounts. Some very small companies and LLPs don't need to have their accounts audited at all.

This guide sets out which companies and LLPs qualify for these arrangements and tells you what information they must provide to Companies House.

It also outlines the audit exemption for dormant companies and LLPs.

Can I file abbreviated accounts?

In most cases, small and medium-sized companies and limited liability partnerships (LLPs) are entitled to submit abbreviated accounts to Companies House - which means they have to provide less information.

From 30 January 2004, to be a small company or LLP, you must meet at least two of these three conditions:

• annual turnover must be £5.6 million or less
• balance sheet total must be £2.8 million or less
• average number of employees must be no more than 50

To be a medium-sized company or LLP, you must meet at least two of these three conditions:

• annual turnover must be £22.8 million or less 
• balance sheet total must be £11.4 million or less 
• average number of employees must be no more than 250

Even if a company or LLP stops being small or medium-sized through expansion, it will still be regarded as such for one financial year afterwards. If it then reverts to being small or medium-sized the following year, the exemption will continue uninterrupted.

If you think your company or LLP might qualify, you should consult a professional accountant before preparing abbreviated accounts.

There are special rules for groups of small and medium-sized companies and LLPs whose total overall size falls within the small and medium categories. For further information you can read the guide to accounting exemptions for small and medium-sized companies at the Companies House website.

Abbreviated accounts can cut costs and save time. You also minimise the information made available to others, especially rivals. When you're a small and growing company you may not want full details of the money you earn and spend to be widely known.

But remember, potential customers, suppliers, investors and lenders may check your accounts before doing business with you.

Abbreviated accounts for small companies and LLPs

The abbreviated accounts of a small company or limited liability partnership (LLP) don't have to include the full balance sheet, profit and loss account or director's report normally required by Companies House.

But you must include:

• abbreviated balance sheet and notes explaining in more detail the make-up of the figures in the balance sheet
• special auditor's report - unless you're also claiming audit exemption. See the page in this guide: do I qualify for an audit exemption?

The auditor's report must state that in the auditor's opinion you are entitled to submit abbreviated accounts in line with the relevant section of the Companies Act.

In the balance sheet you must include a statement that the accounts are prepared in accordance with the special provisions in part VII of the Companies Act relating to small companies and LLPs.

For more information on submitting your accounts, see our guide on how to file accounts at Companies House.

Abbreviated accounts for medium-sized companies and LLPs

The abbreviated accounts of a qualifying medium-sized company or limited liability partnership (LLP) don't have to include the full profit and loss account that larger companies and LLPs have to file at Companies House.

But you must include:

• abbreviated profit and loss account
• full balance sheet
• special auditor's report
• directors' report (no requirement for equivalent members' report for LLPs)
• notes to the accounts

In the balance sheet and directors' report you must state that the accounts have been prepared in line with the special provisions in part VII of the Companies Act relating to medium-sized companies and LLPs.

The auditor's report must state that your company or LLP is entitled to submit abbreviated accounts in line with the relevant section of the Companies Act.

See our guide on how to file accounts at Companies House.

Do I qualify for an audit exemption?

Although all companies and limited liability partnerships (LLPs) have to submit some form of accounts to Companies House, these accounts don't have to be audited if you:

• qualify as a small company or LLP for the purposes of filing abbreviated accounts - see the page in this guide: can I file abbreviated accounts? 
• have a turnover of not more than £5.6 million
• have a balance sheet total of not more than £2.8 million

In these cases you can submit audited accounts if you wish, but it's not compulsory. Bear in mind there can be drawbacks. Banks, credit managers and your customers and suppliers rely on information from Companies House to assess creditworthiness and will be reassured by an independent audit.

There are a number of exceptions to these criteria for audit exemptions.

For exceptions relating to companies, see the guide on accounts and accounting reference dates at the Companies House website.

For exceptions relating to LLPs, see the guide on limited liability partnerships, administration and management at the Companies House website.

Get further information for businesses in Northern Ireland at the Companies Registry website.

What audit-exempt companies and LLPs must send to Companies House

If you qualify for an audit exemption, you can deliver unaudited accounts to Companies House in the form of an abbreviated balance sheet and notes.

The notes must state that:

• the company or limited liability partnership (LLP) was entitled to audit exemption for that year under the relevant section of the Companies Act
• in the case of companies, shareholders haven't required the company to obtain an audit
• the company directors or LLP members acknowledge their responsibility for preparing accounts that comply with section 221 of the Companies Act
• the company directors or LLP members acknowledge their responsibility for preparing accounts which give a "true and fair view" of the state of affairs of the company and of its profit or loss for the year
• the accounts have been prepared in accordance with the special provisions of the Companies Act relating to small companies and LLPs

The audit exemption also applies to Company Tax Returns (CT600). This means companies can also submit the unaudited accounts they prepare for Companies House to HM Revenue & Customs (HMRC). Find further information on Company Tax Returns at the HMRC website.

Find further information for businesses in Northern Ireland on the Companies Registry website.

Audit exemptions for dormant companies and LLPs

A company or limited liability partnership (LLP) is dormant if it has had no "significant" accounting transactions during a financial year.

Some dormant companies and LLPs can't take advantage of audit exemptions. They include regulated financial companies and insurance market businesses.

If your company or LLP is dormant, you can generally claim exemption from sending in audited accounts and need only prepare and deliver an abbreviated balance sheet and notes to Companies House.

A company does not have to include a profit and loss account and directors' report in dormant company accounts, but a directors' report must be provided to shareholders.

Unaudited dormant accounts are much simpler than those of a trading company or LLP. However, they must contain:

• an abbreviated balance sheet stating that the company or LLP was dormant throughout the accounting period
• for a company - any previous year's figures for comparison
• for an LLP - the previous year's figures for comparison
• notes to the balance sheet - covering a wide range of information (the information required differs for companies and for LLPs)

Remember that if your company or LLP starts trading again, full accounts would then be needed for that period and you might need to appoint auditors.