Micro-Entity Accounts Explained

What a micro-entity is

A company qualifies as a micro-entity if it meets at least two of three thresholds set by company law: turnover, balance sheet total and employee count, each below limits that have been raised over time. Many owner-managed businesses, contractors' companies and SPVs fall into this category.

What micro-entity accounts contain

• A very simple balance sheet: fixed assets, current assets, creditors and net assets
• Called-up share capital and the profit and loss reserve
• Minimal notes — often none beyond the statutory statements

What they leave out

There is no profit and loss account on the public register, so you cannot see turnover, margins or profitability. There are no employee numbers, no breakdown of debtors and creditors, and no cash flow information. The balance sheet is also presented at historic cost with limited disclosure.

How much weight to place on them

Micro-entity accounts can still tell you useful things: whether equity is positive and growing, whether the balance sheet is strengthening or weakening, and whether the company files on time. But they cannot confirm profitability. When a micro-entity asks you for significant credit, the honest position is that the public filing is thin — ask for more: management accounts, references, or payment terms that limit your exposure.

A note on filleted accounts

Small companies can file abbreviated 'filleted' accounts that withhold the P&L and directors' report from the public register. The effect is similar: solvency visible, profitability hidden. FirmVerdict labels the account type on every figure so you always know how much the filing can support.