The Economic Crime and Corporate Transparency Act of 2023 is ushering in significant changes for small companies. Under these new regulations, small businesses will now have to submit a profit and loss account as well as a directors’ report. This measure is designed to make crucial data, such as turnover figures, accessible on the public register. It’s important to note that companies will no longer have the option to file abridged accounts.
What’s more, this act restructures the filing requirements for small companies and micro-entities. Rather than grouping them together in the Companies Act of 2006, the Economic Crime and Corporate Transparency Act of 2023 separates these requirements into two distinct sections. The aim is to provide greater clarity for companies when it comes to understanding their filing obligations. These changes encompass sections 53 to 58, beginning on page 47 of the document.
Under these updated rules, small companies must adhere to section 396 of the Companies Act 2006 when preparing their annual accounts. In practice, this means that small businesses will now need to furnish a profit and loss account and a directors’ report. This change guarantees that essential details, such as turnover, become publicly available through Companies House.
A company qualifies as “small” if it meets two of the following criteria: a turnover of less than £10.2 million, a balance sheet total of £5.1 million or less, and a workforce of 50 employees or fewer. These criteria serve to determine whether a company falls under the new small company filing requirements set forth by the Economic Crime and Corporate Transparency Act of 2023.