Companies (Amendment) Act, 1986

• Permanent Page URL

Small companies and medium-sized companies.

8.—(1) Subject to section 9 of this Act—

(a) a private company shall qualify to be treated as a small company for the purposes of this Act in respect of any financial year of the company if, in respect of that year and the financial year of the company immediately preceding that year, the company satisfies at least two of the conditions specified in subsection (2) of this section, and

(b) a private company shall qualify to be treated as a medium-sized company for the purposes of this Act in respect of any financial year of the company if, in respect of that year and the financial year of the company immediately preceding that year, the company satisfies at least two of the conditions specified in subsection (3) of this section.

(2) The qualifying conditions for a company to be treated as a small company in respect of any financial year are as follows:

(a) its balance sheet total for that year shall not exceed £1,250,000,

(b) the amount of its turnover for that year shall not exceed £2,500,000, and

(c) the average number of persons employed by the company in that year shall not exceed 50.

(3) The qualifying conditions for a company to be treated as a medium-sized company in respect of any financial year are as follows:

(a) its balance sheet total for that year shall not exceed £5,000,000,

(b) the amount of its turnover for that year shall not exceed £10,000,000, and

(c) the average number of persons employed by the company in that year shall not exceed 250.

(4) In this section “balance sheet total”, in relation to any financial year of a company, means—

(a) where Format 1 of the balance sheet formats set out in the Schedule to this Act is adopted by the company, the aggregate of the amounts shown in the company's balance sheet for that year under headings corresponding to items A and B in that Format, and

(b) where Format 2 of those formats is adopted by the company, the aggregate of the amounts so shown under “Assets”.

(5) In this section “amount of turnover”, in relation to any financial year of a company, means the amounts of the turnover shown in the profit and loss account of the company under headings corresponding to the relevant items in any of the Formats of profit and loss accounts set out in the Schedule to this Act.

(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 amounts specified in subsections (2) (b) and (3) (b) of this section shall be proportionately adjusted.

(7) A private company which is incorporated on or after the commencement of this section shall qualify to be treated as a small company or, as the case may be, as a medium-sized company, in respect of its first financial year if it satisfies at least two of the relevant qualifying conditions specified in subsection (2) or (3), as may be appropriate, of this section in respect of that financial year.

(8) A private company which was incorporated before such commencement shall qualify to be treated under subsection (1) of this section as a small company or, as the case may be, as a medium-sized company, in respect of the first financial year of the company in which accounts of the company are required to be prepared in accordance with section 3 of this Act if it satisfies at least two of the relevant qualifying conditions specified in subsection (2) or (3), as may be appropriate, of this section in respect of either that first financial year or the financial year immediately preceding that year.

(9) For the purposes of subsections (2) (c) and (3) (c) of this section, 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 this Act for determining the number required by subparagraph (1) of that paragraph to be stated in a note to the accounts of a company.

(10) In determining for the purposes of subsection (8) of this section whether a company satisfies at least two of the relevant conditions specified in subsection (2) or (3), as may be appropriate, of this section in respect of a financial year in a case where the accounts of the company in respect of that year prepared under the Companies Acts, 1963 to 1983, are not prepared in accordance with this Act, subsection (4) of this section shall be construed as referring to the aggregate of any amounts included in the balance sheet of the company for that year which correspond to the amounts mentioned in paragraph (a) or (b), as may be appropriate, of that subsection.

(11) The Minister may by order substitute different amounts, totals and numbers, respectively, for the amounts, totals and numbers specified for the time being in subsections (2) and (3) of this section and those subsections shall have effect in accordance with any order for the time being in force under this section.

(12) An order under this section shall be laid before each House of the Oireachtas as soon as may be after it is made and, if a resolution annulling the order is passed by either such House within the next twenty-one days on which that House has sat after the order is laid before it, the order shall be annulled accordingly but without prejudice to the validity of anything previously done thereunder.