Check whether your limited company gets an exemption from having its accounts audited. Find out what you need to put on the accounts if not, and the steps to take if shareholders ask for a company audit.
AUDIT EXEMPTION: The majority of small private limited companies do not need auditing. Exceptions do apply if shareholders request one, or its articles of association say so.
A limited company may qualify for an audit exemption if 2 or more apply:
The rules changed for financial years between the 1st of October 2012 and the 31st of December 2015. In this case a limited company should qualify for an audit exemption if 2 or more apply:
What if you were running a limited company with financial years in 2012 before the 1st of October? In this case it should qualify for an audit exemption if both these apply:
There are specific rules on audit exemption for small private limited companies. You must include this statement on the company balance sheet of the accounts.
For the year ending [your company's year end date], the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.
The members have not required the company to obtain an audit of its accounts for the year in question in accordance with section 476.
The directors acknowledge their responsibilities for complying with the requirements of the Act with respect to accounting records and the preparation of accounts.
These accounts have been prepared in accordance with the provisions applicable to companies subject to the small companies' regime.
Certain other rules apply even if the company is usually exempt from having an audit. If shareholders owning at least 10% of shares ask for an audit (by number or value) then the company must get the accounts audited.
Note: The request for a company audit can be from an individual shareholder or a group of shareholders.
Company shareholders must make the request in writing. It should get sent to the registered office address of the company. There is a deadline for making the request. It must arrive at least one month of the financial year end for the requested audit.
Note: Some limited companies need auditing even if they meet the rules for audit exemption. For example, there must be an audit of private limited companies if at any time in the financial year they have been:
Audit Exemption for Private Limited Companies in the United Kingdom