Statements on a small company balance sheet

Every small company balance sheet needs a statement above the director’s signature that the accounts are prepared under the small companies regime, or under the micro entity provisions. If the company is not audited, three further audit exemption statements are required by section 475 of the Companies Act 2006. Filed accounts that leave out the profit and loss account, or that are abridged, need extra statements of their own.

Where do the statements go and who signs?

Section 414 requires the annual accounts to be approved by the board and signed on behalf of the board by a director, with the signature on the balance sheet. The statements discussed on this page all sit on the balance sheet itself, above that signature: section 414(3) says the small companies regime statement must be in a prominent position above it, and section 475(4) says the audit exemption statements must appear above it too. A statement placed in the directors’ report, on a cover page or in the notes does not meet these sections.

The copy delivered to Companies House must state the name of the director who signed (section 444(6)). Companies House says it will reject accounts that do not show the printed name of the person who signed the balance sheet, even if the signature is legible. For the micro entity statement, its guidance adds that it should appear in the original accounts sent to members, not only in the copy filed. The wider choice of what to deliver is covered in small company accounts filing options.

What is the small companies regime statement?

Section 414(3) applies whenever accounts are prepared in accordance with the small companies regime. The balance sheet must contain:

• for individual accounts prepared under the micro entity provisions, a statement to that effect (section 414(3)(a));
• for any other small companies regime accounts, a statement that the accounts have been prepared in accordance with the provisions applicable to companies subject to the small companies regime (section 414(3)(b)).

Companies House gives this wording for small companies: “The accounts have been prepared in accordance with the special provisions applicable to companies subject to the small companies regime.” For micro entities it suggests: “The accounts have been prepared in accordance with the micro entity provisions and have been delivered in accordance with the provisions applicable to companies subject to the small companies regime.” A small parent that chooses to prepare group accounts also needs the regime statement on the group balance sheet.

What audit exemption statements are needed?

Section 475(2) says a company is not entitled to an audit exemption unless its balance sheet contains a statement by the directors to that effect. Section 475(3) adds two more for the small (section 477), subsidiary (section 479A) and dormant (section 480) exemptions: that the members have not required an audit under section 476, and that the directors acknowledge their responsibilities for complying with the Act on accounting records and preparing accounts. Companies House gives this sample wording for a small company:

• “For the year ending (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.”

The first statement changes for other exemptions: it cites section 480 for a dormant company or section 479A for a subsidiary relying on a parent guarantee. The statement about members is not a formality. Under section 476, members holding at least 10% in nominal value of the issued share capital or of any class, or 10% of members where there is no share capital, can require an audit by notice given during the year and no later than one month before its end. See can shareholders demand an audit and audit exemption for small companies for who qualifies.

What extra wording applies when the profit and loss account is not filed?

Small companies, including micro entities, currently file under section 444, which lets them deliver the balance sheet without the profit and loss account or directors’ report. Section 444(5) then requires the filed balance sheet to contain, in a prominent position, a statement that the annual accounts and reports have been delivered in accordance with the provisions applicable to companies subject to the small companies regime. Section 444(5A) also requires the filed balance sheet to disclose that the profit and loss account has not been delivered.

If the company is audited and omits the profit and loss account, it may also leave out the auditor’s report, but section 444(5B) requires the notes to say whether the report was qualified or unqualified, give the basis of any qualification, refer to any emphasis of matter and name the auditor and senior statutory auditor. Section 444(5C) disapplies subsection (5A) for a micro entity preparing micro entity accounts.

What statement is needed for abridged accounts?

Paragraph 1A of Schedule 1 to the Small Companies and Groups (Accounts and Directors’ Report) Regulations 2008 lets directors draw up an abridged balance sheet or profit and loss account only if all the members consent. The consent can only be given for the preceding financial year, and abridgement is not available to a company that was a charity at any time in the year. Section 444(2A) then requires the company to deliver a statement that all members have consented. Companies House expects wording on the balance sheet such as: “The members have agreed to the preparation of abridged accounts for this accounting period in accordance with section 444(2A).”

Which statements apply in which case?

Situation	Statements on the balance sheet
Micro entity, audit exempt	Micro entity provisions statement; three audit exemption statements
Small, full accounts filed, audit exempt	Small companies regime statement; three audit exemption statements
Small, profit and loss account not filed, audit exempt	As above, plus delivery statement under section 444(5) and disclosure under section 444(5A)
Small, abridged	As applicable above, plus members’ consent statement under section 444(2A)
Small, audited, profit and loss account not filed	Regime and delivery statements; audit report details in the notes under section 444(5B)

Illustration only. A small trading company with a 31 March 2026 year end, not audited, filing only its balance sheet, would show above the director’s signature: the section 477 exemption statement for the year ending 31 March 2026, the section 476 members statement, the directors’ responsibilities statement, the small companies regime statement, and a statement that the accounts have been delivered under the small companies regime without the profit and loss account. Below them come the signature, the printed name of the director and the date of approval.

What changes from April 2028?

Companies House said on 23 October 2026 that the plan to make small companies and micro entities deliver a profit and loss account from 1 April 2028 has been paused, and that abridged accounts will stay. From the same date a company claiming an audit exemption will need an enhanced directors’ statement identifying the exemption claimed and confirming that the company qualifies. This matches the replacement section 475(2) inserted by the Economic Crime and Corporate Transparency Act 2023, which is not yet in force for this purpose. Until then the current wording applies.

What mistakes come up most often?

• Putting the statements below the signature, or in the notes, contrary to sections 414(3) and 475(4).
• Citing section 477 for a dormant company or a guaranteed subsidiary instead of section 480 or 479A.
• Leaving out the members statement or the directors’ responsibilities statement, which are separate requirements under section 475(3).
• Omitting the printed name of the signing director.
• Confusing the balance sheet statements with the separate statement required in a directors’ report that takes the small companies exemption, which section 419(2) puts above the signature on that report.

Approving accounts that do not comply with the Act is an offence under section 414(4) for a director who knew, or was reckless, and failed to take reasonable steps to prevent it.

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Related Accountapedia entries

• Approving and signing company accounts
• LLP accounts: what must be filed
• Reading a company’s accounts from Companies House
• Common errors in small company accounts
• Can an LLP claim audit exemption
• Correcting filed accounts: revised and defective accounts
• Disclosing off balance sheet arrangements

Sources

• legislation.gov.uk: Act 2006 c. 46, section 414
• legislation.gov.uk: Act 2006 c. 46, section 475
• legislation.gov.uk: Act 2006 c. 46, section 476
• legislation.gov.uk: Act 2006 c. 46, section 444
• legislation.gov.uk: SI 2008/409, schedule 1
• GOV.UK: Life of a company part 1 accounts
• legislation.gov.uk: Act 2006 c. 46, section 419

Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 19 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.