(1) Where an independent assessor has been appointed to report on a poll, the company must ensure that the following information is made available on a website—
(a) the fact of his appointment,
(b) his identity,
(c) the text of the resolution or, as the case may be, a description of the subject matter of the poll to which his appointment relates, and
(d) a copy of a report by him which complies with section 347.
(2) The provisions of section 353 (requirements as to website availability) apply.
(3) In the event of default in complying with this section (or with the requirements of section 353 as it applies for the purposes of this section), an offence is committed by every officer of the company who is in default.
(4) A person guilty of an offence under subsection (3) is liable on summary conviction to a fine not exceeding level 3 on the standard scale.
(5) Failure to comply with this section (or the requirements of section 353) does not affect the validity of—
(a) the poll, or
(b) the resolution or other business (if passed or agreed to) to which the poll relates.
(1) The provisions of section 341 (results of poll to be made available on website) apply (with any necessary modifications) in relation to a meeting of holders of a class of shares of a quoted company or traded company in connection with the variation of the rights attached to such shares as they apply in relation to a general meeting of the company.
(1A) The provisions of section 342 to 351 (independent report on poll) apply (with any necessary modifications) in relation to a meeting of holders of a class of shares of a quoted company in connection with the variation of the rights attached to such shares as they apply in relation to a general meeting of the company.
(2) For the purposes of this section—
(a) any amendment of a provision contained in a company's articles for the variation of the rights attached to a class of shares, or the insertion of any such provision into the articles, is itself to be treated as a variation of those rights, and
(b) references to the variation of rights attached to a class of shares include references to their abrogation.
(1) The following provisions apply for the purposes of—
section 341 (results of poll to be made available on website), and
section 351 (report of independent observer to be made available on website).
(2) The information must be made available on a website that—
(a) is maintained by or on behalf of the company, and
(b) identifies the company in question.
(3) Access to the information on the website, and the ability to obtain a hard copy of the information from the website, must not be conditional on the payment of a fee or otherwise restricted.
(4) The information—
(a) must be made available as soon as reasonably practicable, and
(b) must be kept available throughout the period of two years beginning with the date on which it is first made available on a website in accordance with this section.
(5) A failure to make information available on a website throughout the period specified in subsection (4)(b) is disregarded if—
(a) the information is made available on the website for part of that period, and
(b) the failure is wholly attributable to circumstances that it would not be reasonable to have expected the company to prevent or avoid.
354 Power to limit or extend the types of company to which provisions of this Chapter apply
(1) The Secretary of State may by regulations—
(a) limit the types of company to which some or all of the provisions of this Chapter apply, or
(b) extend some or all of the provisions of this Chapter to additional types of company.
(2) Regulations under this section extending the application of any provision of this Chapter are subject to affirmative resolution procedure.
(3) Any other regulations under this section are subject to negative resolution procedure.
(4) Regulations under this section may—
(a) amend the provisions of this Chapter (apart from this section);
(b) repeal and re-enact provisions of this Chapter with modifications of form or arrangement, whether or not they are modified in substance;
(c) contain such consequential, incidental and supplementary provisions (including provisions amending, repealing or revoking enactments) as the Secretary of State thinks fit.
(1) Every company must keep records comprising—
(a) copies of all resolutions of members passed otherwise than at general meetings,
(b) minutes of all proceedings of general meetings, and
(c) details provided to the company in accordance with section 357 (decisions of sole member).
(2) The records must be kept for at least ten years from the date of the resolution, meeting or decision (as appropriate).
(3) If a company fails to comply with this section, an offence is committed by every officer of the company who is in default.
(4) A person guilty of an offence under this section is liable on summary conviction to a fine not exceeding level 3 on the standard scale and, for continued contravention, a daily default fine not exceeding one-tenth of level 3 on the standard scale.
(1) This section applies to the records kept in accordance with section 355.
(2) The record of a resolution passed otherwise than at a general meeting, if purporting to be signed by a director of the company or by the company secretary, is evidence (in Scotland, sufficient evidence) of the passing of the resolution.
(3) Where there is a record of a written resolution of a private company, the requirements of this Act with respect to the passing of the resolution are deemed to be complied with unless the contrary is proved.
(4) The minutes of proceedings of a general meeting, if purporting to be signed by the chairman of that meeting or by the chairman of the next general meeting, are evidence (in Scotland, sufficient evidence) of the proceedings at the meeting.
(5) Where there is a record of proceedings of a general meeting of a company, then, until the contrary is proved—
(a) the meeting is deemed duly held and convened,
(b) all proceedings at the meeting are deemed to have duly taken place, and
(c) all appointments at the meeting are deemed valid.
(1) This section applies to a company limited by shares or by guarantee that has only one member.
(2) Where the member takes any decision that—
(a) may be taken by the company in general meeting, and
(b) has effect as if agreed by the company in general meeting,
he must (unless that decision is taken by way of a written resolution) provide the company with details of that decision.
(3) If a person fails to comply with this section he commits an offence.
(4) A person guilty of an offence under this section is liable on summary conviction to a fine not exceeding level 2 on the standard scale.
(5) Failure to comply with this section does not affect the validity of any decision referred to in subsection (2).
358 Inspection of records of resolutions and meetings
(1) The records referred to in section 355 (records of resolutions etc) relating to the previous ten years must be kept available for inspection—
(a) at the company's registered office, or
(b) at a place specified in regulations under section 1136.
(2) The company must give notice to the registrar—
(a) of the place at which the records are kept available for inspection, and
(b) of any change in that place,
unless they have at all times been kept at the company's registered office.
(3) The records must be open to the inspection of any member of the company without charge.
(4) Any member may require a copy of any of the records on payment of such fee as may be prescribed.
(5) If default is made for 14 days in complying with subsection (2) or an inspection required under subsection (3) is refused, or a copy requested under subsection (4) is not sent, an offence is committed by every officer of the company who is in default.
(6) A person guilty of an offence under this section is liable on summary conviction to a fine not exceeding level 3 on the standard scale and, for continued contravention, a daily default fine not exceeding one-tenth of level 3 on the standard scale.
(7) In a case in which an inspection required under subsection (3) is refused or a copy requested under subsection (4) is not sent, the court may by order compel an immediate inspection of the records or direct that the copies required be sent to the persons who requested them.
359 Records of resolutions and meetings of class of members
The provisions of this Chapter apply (with necessary modifications) in relation to resolutions and meetings of—
(a) holders of a class of shares, and
(b) in the case of a company without a share capital, a class of members,
as they apply in relation to resolutions of members generally and to general meetings.
360 Computation of periods of notice etc: clear day rule
(1) This section applies for the purposes of the following provisions of this Part—
section 307(1) and (2) (notice required of general meeting),
section 307A(1), (4), (5) and (7)(b) (notice required of general meeting of traded company),
section 312(1) and (3) (resolution requiring special notice),
section 314(4)(d) (request to circulate members' statement),
section 316(2)(b) (expenses of circulating statement to be deposited or tendered before meeting),
section 337(3) (contents of notice of AGM of traded company),
section 338(4)(d)(i) (request to circulate member's resolution at AGM of public company),. . .
section 338A(5) (request to include matter in the business to be dealt with at AGM of traded company),
section 340(2)(b)(i) (expenses of circulating statement to be deposited or tendered before meeting), and
section 340B(2)(b) (traded companies: duty to circulate members' matters for AGM).
(2) Any reference in those provisions to a period of notice, or to a period before a meeting by which a request must be received or sum deposited or tendered, is to a period of the specified length excluding—
(a) the day of the meeting, and
(b) the day on which the notice is given, the request received or the sum deposited or tendered.
(1) Nothing in this Part is to be taken to preclude the holding and conducting of a meeting in such a way that persons who are not present together at the same place may by electronic means attend and speak and vote at it.
(2) In the case of a traded company the use of electronic means for the purpose of enabling members to participate in a general meeting may be made subject only to such requirements and restrictions as are—
(a) necessary to ensure the identification of those taking part and the security of the electronic communication, and
(b) proportionate to the achievement of those objectives.
(3) Nothing in subsection (2) affects any power of a company to require reasonable evidence of the entitlement of any person who is not a member to participate in the meeting.
360AA Traded companies: confirmation of receipt of electronic voting
(1) In the case of a traded company, where a vote is cast on a poll by electronic means the company must ensure that, as soon as reasonably practicable after the vote has been received, confirmation of receipt of the vote is sent by electronic means to—
(a) the member, where that person cast the vote,
(b) the proxy, where the vote was cast by proxy, or
(c) the representative, where the vote was cast by a person authorised to act as a representative of a corporation in accordance with section 323(1).
(2) A vote under subsection (1) includes any vote cast—
(a) at a meeting;
(b) at an electronic meeting conducted in accordance with section 360A;
(c) in advance of a meeting or electronic meeting (see section 322A).
360B Traded companies: requirements for participating in and voting at general meetings
(1) Any provision of a traded company's articles is void in so far as it would have the effect of—
(a) imposing a restriction on a right of a member to participate in and vote at a general meeting of the company unless the member's shares have (after having been acquired by the member and before the meeting) been deposited with, or transferred to, or registered in the name of another person, or
(b) imposing a restriction on the right of a member to transfer shares in the company during the period of 48 hours before the time for the holding of a general meeting of the company if that right would not otherwise be subject to that restriction.
(2) A traded company must determine the right to vote at a general meeting of the company by reference to the register of members as at a time (determined by the company) that is not more than 48 hours before the time for the holding of the meeting.
(3) In calculating the period mentioned in subsection (1)(b) or (2), no account is to be taken of any part of a day that is not a working day.
(4) Nothing in this section affects—
(a) the operation of—
(i) Part 22 of this Act (information about interests in a company's shares),
(ii) Part 15 of the Companies Act 1985 (orders imposing restrictions on shares), or
(iii) any provision in a company's articles relating to the application of any provision of either of those Parts; or
(b) the validity of articles prescribed, or to the same effect as articles prescribed, under section 19 of this Act (power of Secretary of State to prescribe model articles).
(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
360BA Traded companies: right to confirmation of vote after a general meeting
(1) Where the conditions in subsection (2) are met, a traded company must provide information to a member which enables the member to confirm that their vote on a resolution at a general meeting where a poll has been taken has been validly recorded and counted.
(2) The conditions are that—
(a) the member makes a request for the information, which request is received by the company no later than 30 days from the date of that general meeting, and
(b) the member does not have any other reasonable means by which to determine that their vote has been validly recorded and counted by the company.
(3) The information under subsection (1) must be provided to the member as soon as reasonably practicable and in any event by the end of the period of 15 days beginning with whichever is the later of the first working day after the day on which—
(a) the result of the poll is declared for that resolution; or
(b) the request for information under subsection (2)(a) is received by the company.
In this Part, “ traded company ” means a company any shares of which—
(a) carry rights to vote at general meetings, and
(b) are admitted to trading on a UK regulated market or an EU regulated market by or with the consent of the company.
This Part has effect for controlling—
(a) political donations made by companies to political parties, to other political organisations and to independent election candidates, and
(b) political expenditure incurred by companies.
363 Political parties, organisations etc to which this Part applies
(1) This Part applies to a political party if it is registered under Part 2 of the Political Parties, Elections and Referendums Act 2000 (c. 41).
(2) This Part applies to an organisation (a “political organisation”) if it carries on, or proposes to carry on, activities that are capable of being reasonably regarded as intended—
(a) to affect public support for a political party to which, or an independent election candidate to whom, this Part applies, or
(b) to influence voters in relation to any national or regional referendum held under the law of the United Kingdom ....
(3) This Part applies to an independent election candidate at any election to public office held in the United Kingdom ....
(4) Any reference in the following provisions of this Part to a political party, political organisation or independent election candidate, or to political expenditure, is to a party, organisation, independent candidate or expenditure to which this Part applies.
(1) The following provisions have effect for the purposes of this Part as regards the meaning of “political donation”.
(2) In relation to a political party or other political organisation—
(a) “political donation” means anything that in accordance with sections 50 to 52 of the Political Parties, Elections and Referendums Act 2000—
(i) constitutes a donation for the purposes of Chapter 1 of Part 4 of that Act (control of donations to registered parties), or
(ii) would constitute such a donation reading references in those sections to a registered party as references to any political party or other political organisation,
and
(b) section 53 of that Act applies, in the same way, for the purpose of determining the value of a donation.
(3) In relation to an independent election candidate—
(a) “political donation” means anything that, in accordance with sections 50 to 52 of that Act, would constitute a donation for the purposes of Chapter 1 of Part 4 of that Act (control of donations to registered parties) reading references in those sections to a registered party as references to the independent election candidate,
and
(b) section 53 of that Act applies, in the same way, for the purpose of determining the value of a donation.
(4) For the purposes of this section, sections 50 and 53 of the Political Parties, Elections and Referendums Act 2000 (c. 41) (definition of “donation” and value of donations) shall be treated as if the amendments to those sections made by the Electoral Administration Act 2006 (which remove from the definition of “donation” loans made otherwise than on commercial terms) had not been made.
(1) In this Part “political expenditure”, in relation to a company, means expenditure incurred by the company on—
(a) the preparation, publication or dissemination of advertising or other promotional or publicity material—
(i) of whatever nature, and
(ii) however published or otherwise disseminated,
that, at the time of publication or dissemination, is capable of being reasonably regarded as intended to affect public support for a political party or other political organisation, or an independent election candidate, or
(b) activities on the part of the company that are capable of being reasonably regarded as intended—
(i) to affect public support for a political party or other political organisation, or an independent election candidate, or
(ii) to influence voters in relation to any national or regional referendum held under the law of the United Kingdom.
(2) For the purposes of this Part a political donation does not count as political expenditure.
366 Authorisation required for donations or expenditure
(1) A company must not—
(a) make a political donation to a political party or other political organisation, or to an independent election candidate, or
(b) incur any political expenditure,
unless the donation or expenditure is authorised in accordance with the following provisions.
(2) The donation or expenditure must be authorised—
(a) in the case of a company that is not a subsidiary of another company, by a resolution of the members of the company;
(b) in the case of a company that is a subsidiary of another company by—
(i) a resolution of the members of the company, and
(ii) a resolution of the members of any relevant holding company.
(3) No resolution is required on the part of a company that is a wholly-owned subsidiary of a UK-registered company.
(4) For the purposes of subsection (2)(b)(ii) a “relevant holding company” means a company that, at the time the donation was made or the expenditure was incurred—
(a) was a holding company of the company by which the donation was made or the expenditure was incurred,
(b) was a UK-registered company, and
(c) was not a subsidiary of another UK-registered company.
(5) The resolution or resolutions required by this section—
(a) must comply with section 367 (form of authorising resolution), and
(b) must be passed before the donation is made or the expenditure incurred.
(6) Nothing in this section enables a company to be authorised to do anything that it could not lawfully do apart from this section.
(1) A resolution conferring authorisation for the purposes of this Part may relate to—
(a) the company passing the resolution,
(b) one or more subsidiaries of that company, or
(c) the company passing the resolution and one or more subsidiaries of that company.
(2) A resolution may be expressed to relate to all companies that are subsidiaries of the company passing the resolution—
(a) at the time the resolution is passed, or
(b) at any time during the period for which the resolution has effect,
without identifying them individually.
(3) The resolution may authorise donations or expenditure under one or more of the following heads—
(a) donations to political parties or independent election candidates;
(b) donations to political organisations other than political parties;
(c) political expenditure.
(4) The resolution must specify a head or heads—
(a) in the case of a resolution under subsection (2), for all of the companies to which it relates taken together;
(b) in the case of any other resolution, for each company to which it relates.
(5) The resolution must be expressed in general terms conforming with subsection (3) and must not purport to authorise particular donations or expenditure.
(6) For each of the specified heads the resolution must authorise donations or, as the case may be, expenditure up to a specified amount in the period for which the resolution has effect (see section 368).
(7) The resolution must specify such amounts—
(a) in the case of a resolution under subsection (2), for all of the companies to which it relates taken together;
(b) in the case of any other resolution, for each company to which it relates.
(1) A resolution conferring authorisation for the purposes of this Part has effect for a period of four years beginning with the date on which it is passed unless the directors determine, or the articles require, that it is to have effect for a shorter period beginning with that date.
(2) The power of the directors to make a determination under this section is subject to any provision of the articles that operates to prevent them from doing so.
369 Liability of directors in case of unauthorised donation or expenditure
(1) This section applies where a company has made a political donation or incurred political expenditure without the authorisation required by this Part.
(2) The directors in default are jointly and severally liable—
(a) to make good to the company the amount of the unauthorised donation or expenditure, with interest, and
(b) to compensate the company for any loss or damage sustained by it as a result of the unauthorised donation or expenditure having been made.
(3) The directors in default are—
(a) those who, at the time the unauthorised donation was made or the unauthorised expenditure was incurred, were directors of the company by which the donation was made or the expenditure was incurred, and
(b) where—
(i) that company was a subsidiary of a relevant holding company, and
(ii) the directors of the relevant holding company failed to take all reasonable steps to prevent the donation being made or the expenditure being incurred,
the directors of the relevant holding company.
(4) For the purposes of subsection (3)(b) a “relevant holding company” means a company that, at the time the donation was made or the expenditure was incurred—
(a) was a holding company of the company by which the donation was made or the expenditure was incurred,
(b) was a UK-registered company, and
(c) was not a subsidiary of another UK-registered company.
(5) The interest referred to in subsection (2)(a) is interest on the amount of the unauthorised donation or expenditure, so far as not made good to the company—
(a) in respect of the period beginning with the date when the donation was made or the expenditure was incurred, and
(b) at such rate as the Secretary of State may prescribe by regulations.
Section 379(2) (construction of references to date when donation made or expenditure incurred) does not apply for the purposes of this subsection.
(6) Where only part of a donation or expenditure was unauthorised, this section applies only to so much of it as was unauthorised.
370 Enforcement of directors' liabilities by shareholder action
(1) Any liability of a director under section 369 is enforceable—
(a) in the case of a liability of a director of a company to that company, by proceedings brought under this section in the name of the company by an authorised group of its members;
(b) in the case of a liability of a director of a holding company to a subsidiary, by proceedings brought under this section in the name of the subsidiary by—
(i) an authorised group of members of the subsidiary, or
(ii) an authorised group of members of the holding company.
(2) This is in addition to the right of the company to which the liability is owed to bring proceedings itself to enforce the liability.
(3) An “authorised group” of members of a company means—
(a) the holders of not less than 5% in nominal value of the company's issued share capital,
(b) if the company is not limited by shares, not less than 5% of its members, or
(c) not less than 50 of the company's members.
(4) The right to bring proceedings under this section is subject to the provisions of section 371.
(5) Nothing in this section affects any right of a member of a company to bring or continue proceedings under Part 11 (derivative claims or proceedings).
371 Enforcement of directors' liabilities by shareholder action: supplementary
(1) A group of members may not bring proceedings under section 370 in the name of a company unless—
(a) the group has given written notice to the company stating—
(i) the cause of action and a summary of the facts on which the proceedings are to be based,
(ii) the names and addresses of the members comprising the group, and
(iii) the grounds on which it is alleged that those members constitute an authorised group; and
(b) not less than 28 days have elapsed between the date of the giving of the notice to the company and the bringing of the proceedings.
(2) Where such a notice is given to a company, any director of the company may apply to the court within the period of 28 days beginning with the date of the giving of the notice for an order directing that the proposed proceedings shall not be brought, on one or more of the following grounds—
(a) that the unauthorised amount has been made good to the company;
(b) that proceedings to enforce the liability have been brought, and are being pursued with due diligence, by the company;
(c) that the members proposing to bring proceedings under this section do not constitute an authorised group.
(3) Where an application is made on the ground mentioned in subsection (2)(b), the court may as an alternative to directing that the proposed proceedings under section 370 are not to be brought, direct—
(a) that such proceedings may be brought on such terms and conditions as the court thinks fit, and
(b) that the proceedings brought by the company—
(i) shall be discontinued, or
(ii) may be continued on such terms and conditions as the court thinks fit.
(4) The members by whom proceedings are brought under section 370 owe to the company in whose name they are brought the same duties in relation to the proceedings as would be owed by the company's directors if the proceedings were being brought by the company.
But proceedings to enforce any such duty may be brought by the company only with the permission of the court.
(5) Proceedings brought under section 370 may not be discontinued or settled by the group except with the permission of the court, which may be given on such terms as the court thinks fit.
(1) This section applies in relation to proceedings brought under section 370 in the name of a company (“the company”) by an authorised group (“the group”).
(2) The group may apply to the court for an order directing the company to indemnify the group in respect of costs incurred or to be incurred by the group in connection with the proceedings.
The court may make such an order on such terms as it thinks fit.
(3) The group is not entitled to be paid any such costs out of the assets of the company except by virtue of such an order.
(4) If no such order has been made with respect to the proceedings, then—
(a) if the company is awarded costs in connection with the proceedings, or it is agreed that costs incurred by the company in connection with the proceedings should be paid by any defendant, the costs shall be paid to the group; and
(b) if any defendant is awarded costs in connection with the proceedings, or it is agreed that any defendant should be paid costs incurred by him in connection with the proceedings, the costs shall be paid by the group.
(5) In the application of this section to Scotland for “costs” read “expenses” and for “defendant” read “defender”.
373 Information for purposes of shareholder action
(1) Where proceedings have been brought under section 370 in the name of a company by an authorised group, the group is entitled to require the company to provide it with all information relating to the subject matter of the proceedings that is in the company's possession or under its control or which is reasonably obtainable by it.
(2) If the company, having been required by the group to do so, refuses to provide the group with all or any of that information, the court may, on an application made by the group, make an order directing—
(a) the company, and
(b) any of its officers or employees specified in the application,
to provide the group with the information in question in such form and by such means as the court may direct.
(1) A donation to a trade union, other than a contribution to the union's political fund, is not a political donation for the purposes of this Part.
(2) A trade union is not a political organisation for the purposes of section 365 (meaning of “political expenditure”).
(3) In this section—
“trade union” has the meaning given by section 1 of Trade Union and Labour Relations (Consolidation) Act 1992 (c. 52) or Article 3 of the Industrial Relations (Northern Ireland) Order 1992 (S.I. 1992/807 (N.I. 5));
“political fund” means the fund from which payments by a trade union in the furtherance of political objects are required to be made by virtue of section 82(1)(a) of that Act or Article 57(2)(a) of that Order.
375 Subscription for membership of trade association
(1) A subscription paid to a trade association for membership of the association is not a political donation for the purposes of this Part.
(2) For this purpose—
“trade association” means an organisation formed for the purpose of furthering the trade interests of its members, or of persons represented by its members, and
“subscription” does not include a payment to the association to the extent that it is made for the purpose of financing any particular activity of the association.
(1) An all-party parliamentary group is not a political organisation for the purposes of this Part.
(2) An “all-party parliamentary group” means an all-party group composed of members of one or both of the Houses of Parliament (or of such members and other persons).
(1) Authorisation under this Part is not needed for political expenditure that is exempt by virtue of an order of the Secretary of State under this section.
(2) An order may confer an exemption in relation to—
(a) companies of any description or category specified in the order, or
(b) expenditure of any description or category so specified (whether framed by reference to goods, services or other matters in respect of which such expenditure is incurred or otherwise),
or both.
(3) If or to the extent that expenditure is exempt from the requirement of authorisation under this Part by virtue of an order under this section, it shall be disregarded in determining what donations are authorised by any resolution of the company passed for the purposes of this Part.
(4) An order under this section is subject to affirmative resolution procedure.
378 Donations not amounting to more than £5,000 in any twelve month period
(1) Authorisation under this Part is not needed for a donation except to the extent that the total amount of—
(a) that donation, and
(b) other relevant donations made in the period of 12 months ending with the date on which that donation is made,
exceeds £5,000.
(2) In this section—
“donation” means a donation to a political party or other political organisation or to an independent election candidate; and
“other relevant donations” means—
in relation to a donation made by a company that is not a subsidiary, any other donations made by that company or by any of its subsidiaries;
in relation to a donation made by a company that is a subsidiary, any other donations made by that company, by any holding company of that company or by any other subsidiary of any such holding company.
(3) If or to the extent that a donation is exempt by virtue of this section from the requirement of authorisation under this Part, it shall be disregarded in determining what donations are authorised by any resolution passed for the purposes of this Part.
(1) In this Part—
“director” includes shadow director; and
“organisation” includes any body corporate or unincorporated association and any combination of persons.
(2) Except as otherwise provided, any reference in this Part to the time at which a donation is made or expenditure is incurred is, in a case where the donation is made or expenditure incurred in pursuance of a contract, any earlier time at which that contract is entered into by the company.
381 Companies subject to the small companies regime
The small companies regime . . . applies to a company for a financial year in relation to which the company—
(a) qualifies as small (see sections 382 and 383), and
(b) is not excluded from the regime (see section 384).
(1) A company qualifies as small in relation to its first financial year if the qualifying conditions are met in that year.
(1A) Subject to subsection (2), a company qualifies as small in relation to a subsequent financial year if the qualifying conditions are met in that year.
(2) 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 small company only if it occurs in two consecutive financial years.
(3) The qualifying conditions are met by a company in a year in which it satisfies two or more of the following requirements—
1. Turnover | Not more than £15 million
2. Balance sheet total | Not more than £7.5 million
3. Number of employees | Not more than 50
(4) 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.
(5) The balance sheet total means the aggregate of the amounts shown as assets in the company's balance sheet.
(6) The number of employees means the average number of persons employed by the company in the year, determined as follows—
(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),
(b) add together the monthly totals, and
(c) divide by the number of months in the financial year.
(7) This section is subject to section 383 (companies qualifying as small: parent companies).
383 Companies qualifying as small: parent companies
(1) A parent company qualifies as a small company in relation to a financial year only if the group headed by it qualifies as a small group.
(2) A group qualifies as small in relation to the parent company's first financial year if the qualifying conditions are met in that year.
(2A) Subject to subsection (3), a group qualifies as small in relation to a subsequent financial year of the parent company if the qualifying conditions are met in that year.
(3) In relation to a subsequent financial year of the parent company, where on the parent company’s balance sheet date the group meets or ceases to meet the qualifying conditions, that affects the group’s qualification as a small group only if it occurs in two consecutive financial years.
(4) The qualifying conditions are met by a group in a year in which it satisfies two or more of the following requirements—
1. Aggregate turnover | Not more than £15 million net (or £18 million gross)
2. Aggregate balance sheet total | Not more than £7.5 million net (or £9 million gross)
3. Aggregate number of employees | Not more than 50
(5) The aggregate figures are ascertained by aggregating the relevant figures determined in accordance with section 382 for each member of the group.
(6) In relation to the aggregate figures for turnover and balance sheet total—
“net” means after any set-offs and other adjustments made to eliminate group transactions—
in the case of Companies Act accounts, in accordance with regulations under section 404,
in the case of IAS accounts, in accordance with UK-adopted international accounting standards; and
“gross” means without those set-offs and other adjustments.
A company may satisfy any relevant requirement on the basis of either the net or the gross figure.
(7) The figures for each subsidiary undertaking shall be those included in its individual accounts for the relevant financial year, that is—
(a) if its financial year ends with that of the parent company, that financial year, and
(b) if not, its financial year ending last before the end of the financial year of the parent company.
If those figures cannot be obtained without disproportionate expense or undue delay, the latest available figures shall be taken.
384 Companies excluded from the small companies regime
(1) The small companies regime does not apply to a company that ... was at any time within the financial year to which the accounts relate—
(a) a public company,
(b) a company that—
(i) is an authorised insurance company, a banking company, an e-money issuer, a MiFID investment firm or a UCITS management company, or
(ii) carries on insurance market activity, or
(iii) is a scheme funder of a Master Trust scheme within the meanings given by section 39(1) of the Pension Schemes Act 2017 or section 39(1) of the Pension Schemes Act (Northern Ireland) 2021 (interpretation of Part 1), or
(c) a member of an ineligible group.
(2) A group is ineligible if any of its members is—
(a) a traded company,
(b) a body corporate (other than a company) whose shares are admitted to trading on a UK regulated market,
(c) a person (other than a small company) who has permission under Part 4A of the Financial Services and Markets Act 2000 (c. 8) to carry on a regulated activity,
(ca) an e-money issuer,
(d) a small company that is an authorised insurance company, a banking company, ... a MiFID investment firm or a UCITS management company, or
(e) a person who carries on insurance market activity or
(f) a scheme funder of a Master Trust scheme within the meanings given by section 39(1) of the Pension Schemes Act 2017 or section 39(1) of the Pension Schemes Act (Northern Ireland) 2021 (interpretation of Part 1).
(3) A company is a small company for the purposes of subsection (2) if it qualified as small in relation to its last financial year ending on or before the end of the financial year to which the accounts relate.
(1) A company qualifies as a micro-entity in relation to its first financial year if the qualifying conditions are met in that year.
(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.
(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.
(4) The qualifying conditions are met by a company in a year in which it satisfies two or more of the following requirements—
1. Turnover | Not more than £1 million
2. Balance sheet total | Not more than £500,000
3. Number of employees | Not more than 10
(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.
(6) The balance sheet total means the aggregate of the amounts shown as assets in the company’s balance sheet.
(7) The number of employees means the average number of persons employed by the company in the year, determined as follows—
(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),
(b) add together the monthly totals, and
(c) divide by the number of months in the financial year.
(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—
(a) the company qualifies as a micro-entity in relation to that year, as determined by subsections (1) to (7), and
(b) the group headed by the company qualifies as a small group, as determined by section 383(2) to (7).