Section 384A | Companies qualifying as micro-entities ^F1

(1)A company qualifies as a micro-entity in relation to its first financial year if the qualifying conditions are met in that year.^F1

(2)Subject to subsection (3), a company qualifies as a micro-entity in relation to a subsequent financial year if the qualifying conditions are met in that year.^F1

(3)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 micro-entity only if it occurs in two consecutive financial years.^F1

(4)The qualifying conditions are met by a company in a year in which it satisfies two or more of the following requirements—^F1F2F3

(5)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.^F1

(6)The balance sheet total means the aggregate of the amounts shown as assets in the company’s balance sheet.^F1

(7)The number of employees means the average number of persons employed by the company in the year, determined as follows—^F1

(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),^F1

(b)add together the monthly totals, and^F1

(c)divide by the number of months in the financial year.^F1

(8)In the case of a company which is a parent company, the company qualifies as a micro-entity in relation to a financial year only if—^F1

(a)the company qualifies as a micro-entity in relation to that year, as determined by subsections (1) to (7), and^F1

(b)the group headed by the company qualifies as a small group, as determined by section 383(2) to (7).^F1