The company must prepare year end accounts regardless of whether it has traded or not.

• a profit and loss account (or income and expenditure account if the company is not trading for profit);

• a balance sheet signed by a director;

• an auditors' report signed by the auditor (if appropriate);

• a directors' report signed by a director or the secretary of the company;

• notes to the accounts; and

• group accounts (if appropriate).

Year end accounts are submitted to Companies House and the first accounts are required for submission 10 months after the first anniversary of the company's incorporation. Thereafter the accounts must be submitted within 10 months of the accounting year end.

There is no requirement for a company to have their accounts audited if the turnover of the company is less than £5,600,000 during the accounting period.

Companies are classified into one of three categories:

• Small
• Medium
• Large

There are different reporting requirements for a company depending on which category they fall into. However all companies must prepare full accounts for submission to the HM Revenue & Customs.

Small Companies

To qualify as a small company two of the following must be satisfied:

• Turnover less than £5,600,000
• Balance sheet total less than £2,800,000
• Number of employees less than 50

Medium Companies

To qualify as a medium company two of the following must be satisfied:

• Turnover less than £22,800,000
• Balance sheet total less than £11,400,000
• Number of employees less than 250

These companies may submit abbreviated accounts however they cannot take advantage of disclosure exceptions allowed to small companies.

Large Companies

A company is large if it does not fit into the above two categories. Large companies must file full accounts with Companies House.