Companies (Amendment) (No. 2) Act, 1999

Exemption from requirement to have accounts audited.

32.—(1) Subject to section 33 (1), if—

(a) the directors of a private company are of opinion that the company will satisfy the conditions specified in subsection (3) in respect of a financial year and decide that the company should avail itself of the exemption in that year (and they record that decision in the minutes of the meeting concerned), and

(b) unless that financial year is the first financial year of the company, the company satisfied the said conditions in respect of the preceding financial year,


(i) without prejudice to section 35 , section 160 of the Principal Act (which requires the appointment of an auditor to a company) shall not apply to the said company in respect of that financial year, and

(ii) unless and until circumstances, if any, arise in that financial year which result in one or more of the said conditions not being satisfied in respect of that year, the provisions mentioned in subsection (2) shall not apply to the said company in respect of that year.

(2) The provisions mentioned in subsection (1) are those provisions of the Companies Acts, 1963 to 1999, (other than this Part) the 1993 Regulations and the European Communities (Single— Member Private Limited Companies) Regulations, 1994 ( S.I. No. 275 of 1994 ), that apply to the company, being provisions that—

(a) confer any powers on an auditor or require anything to be done by or to or as respects an auditor,

(b) make provision on the basis of a report of an auditor having been prepared in relation to the accounts of the company in a financial year,

and, without prejudice to the generality of the foregoing, include the provisions specified in the First Schedule.

(3) The conditions mentioned in subsection (1) are that—

(a) in respect of the year concerned—

(i) the company is a company to which the Act of 1986 applies,

(ii) the amount of the turnover of the company does not exceed £250,000,

(iii) the balance sheet total of the company does not exceed £1,500,000,

(iv) the average number of persons employed by the company does not exceed 50,

(v) the company is not—

(I) a parent undertaking or a subsidiary undertaking (within the meaning of the European Communities (Companies: Group Accounts) Regulations, 1992 ( S.I. No. 201 of 1992 )),

(II) a holder of a licence under section 9 of the Central Bank Act, 1971 , or a company that is exempt from the requirement under that Act to hold such a licence,

(III) a company to which the European Communities (Insurance Undertakings: Accounts) Regulations, 1996 ( S.I. No. 23 of 1996 ) apply, or

(IV) a company referred to in the Second Schedule (other than paragraph 18 thereof),


(b) a failure to comply with the requirement of section 127(1) of the Principal Act as regards the forwarding, to the registrar of companies, of an annual return in respect of the company does not occur in the year concerned.

(4) In this section “amount of turnover” and “balance sheet total” have the same meaning as they have in section 8 of the Act of 1986.

(5) For the purpose of subsection (3)(a)(iv), the average number of persons employed by a company shall be determined by applying the method of calculation prescribed by paragraph 42(4) of the Schedule to the Act of 1986 for determining the number required by subparagraph (1) of that paragraph to be stated in a note to the accounts of a company.

(6) In the application of this section to any period which is a financial year of a company, but is not in fact a year, the amount specified in subsection (3)(a)(ii) shall be proportionally adjusted.

(7) Each occasion of an amendment of the kind referred to in subsection (8) being effected shall operate to enable the Minister to amend, by order, subparagraphs (ii) and (iii) of subsection (3)(a) by substituting for the amount and the total, respectively, specified in those provisions a greater amount and total (not being an amount or total that is greater than the amount or total it replaces by 25 per cent.).

(8) The amendment referred to in subsection (7) is an amendment of the total and the amount specified in paragraphs (a) and (b), respectively, of section 8(2) of the Act of 1986, being an amendment made for the purpose of giving effect to an act adopted by an institution of the European Communities.