Making life easier for the smallest companies

Published 01-02-2013
One of the EU directives incorporated into the EEA Agreement on 1 February 2013 allows national authorities to exempt micro-entities or small companies with less than ten employees from the obligation to publish their annual accounts. It is, however, up to each country to decide whether or not to make use of this option.

The Directive on annual accounts for micro-entities, which was adopted by the European Union last year, is designed to alleviate the regulatory burden on micro-entities. It has been estimated that there are around five million micro-entities in the EU, representing approximately three-quarters of all companies.

The Directive sets no deadline for transposing the EU rules into national law, but allows each country to decide whether or not to implement them. If applied, the exemption to publish annual accounts could be granted to a company that fulfils two of the following three criteria: a balance sheet total of a maximum of EUR 350 000, a net turnover not higher than EUR 700 000, or an average number of ten employees or less during the financial year. The Directive does not, however, exempt companies from drafting simplified annual accounts.

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