(This note is not part of the Regulations)

These Regulations introduce an exemption from certain financial reporting requirements ("the Micros-Exemption") for very small companies ("Micro-Entities") preparing Companies Act individual accounts. The Micros-Exemption forms part of Directive 2013/34/EU of the European Parliament and of the Council of 26 June 2013 on the annual financial statements, consolidated financial statements and related reports of certain types of undertakings, amending Directive 2006/43/EC of the European Parliament and of the Council and repealing Council Directives 78/660EEC and 83/349/EEC (OJ No L 182, 29.6.13, p 19) ("the New Accounting Directive") and these Regulations implement that part of the New Accounting Directive.

Regulation 3 limits the application of these Regulations to companies formed and registered (or treated as formed and registered) under the 2006 Act.

Regulation 4 inserts new sections 384A and 384B into the 2006 Act. Section 384A prescribes the thresholds, based on turnover, balance sheet total and employee numbers, relevant to qualification as a Micro-Entity. Section 384B identifies those categories of company (including charities, those companies already excluded from the small companies' regime under Part 15 of the 2006 Act and those companies voluntarily preparing group accounts (or whose accounts are included in consolidated group accounts prepared by another company)) which are excluded from being treated as Micro-Entities.