Most small private limited companies do not need an audit. A company is classified as small if it meets two of the following criteria:
- an annual turnover of no more than £10.2 million
- assets worth no more than £5.1 million
- 50 or fewer employees on average
However, even if your company’s usually exempt from an audit, you must get your accounts audited if:
(1) You are a certain type of company
Your company must have an audit if at any time in the financial year it’s been:
- a public company (unless it’s dormant)
- a subsidiary company (unless it qualifies for an exception)
- an authorised insurance company or carrying out insurance market activity
- involved in banking or issuing e-money
- a Markets in Financial Instruments Directive (MiFID) investment firm or an Undertakings for Collective Investment in Transferable Securities (UCITS) management company
- a corporate body and its shares have been traded on a regulated market in a European state
(2) Your articles of association say you must have an audit
(3) if the company shareholders ask for one.
Even if your company’s usually exempt from an audit, you must get your accounts audited if shareholders who own at least 10% of shares (by number or value) ask you to. This can be an individual shareholder or a group of shareholders.
They must make the request in writing and send it to the company’s registered office address.
The request must arrive at least one month before the end of the financial year that the audit is being asked for.
If you do not have an audit you must include a statement in your accounts that the company is entitled to exemption from audit.