Exemptions available in relation to Financial Statements
Although the company must lay full Financial Statements before an AGM, depending on the type and size of the company it may be able to claim an exemption from filing full, or any, Financial Statements with the CRO. Companies meeting specific criteria could possibly claim one or more of the following exemptions:
You can use the table below to check what exemptions are available to your company type. Once you establish that your company type can avail of an exemption, the directors must check that your company meets the criteria for the exemption.
Company Types And Exemptions |
Audit | Dormant | Financial Statements |
Size/ Abridgement |
No. Of Members Who Can Insist On An Audit |
LTD Company (Part 2 Companies Act 2014) |
Yes | Yes | No | Yes | One or more member representing at least 10% of the Voting rights |
DAC Shares (Part 16, CA 2014) Designated Activity Companies |
Yes | Yes | No | Yes | One or more member representing at least 10% of the Voting rights |
DAC Guarantee (Part 16, CA2014) Designated Activity Companies |
Yes | Yes | Yes | Yes | One or more member representing at least 10% of the Voting rights |
CLG – (Part 18, CA2014) Company Limited by Guarantee | Yes | Yes | Yes | Yes | 1 member |
PLC (Part 17, CA2014) Public Limited Company |
No | No | No | No | Not applicable |
PUC (Part 19, CA2014) Public Unlimited Company |
No | No | No | No | Not applicable |
PULC (Part 19, CA2014) Public Unlimited Company without share capital |
No | No | No | No | Not applicable |
ULC non-designated (Part 19, CA2014) Private Unlimited Company |
Yes | Yes | Yes | Yes | One or more members representing at least 10% of the voting rights |
ULC designated (Part 19, CA2014) Private Unlimited Company |
Yes | Yes | No | Yes | One or more members representing at least 10% of the voting rights |
Is every company type eligible for the size/abridgement exemption from filing full Financial Statements?
The size exemption does not apply to Public Limited Companies (PLC) or Public Unlimited Companies (PUC/PULC) or any company falling within any provision of the Fifth Schedule to the 2014 Act. All other types of companies which are classed as small or micro companies can claim an exemption from filing full Financial Statements and file abridged Financial Statements instead (s.353).
Is every company type eligible for the small company / Dormant Company audit exemption?
The following companies are not entitled to either exemption:
The exemptions available to different types and sizes of company, and conditions applying, are detailed in the following sections:
Small Companies
A small company that satisfies certain conditions can claim three types of exemption:
Exemption from filing full Financial Statements (the “size/abridgement exemption”) (s.352)
To qualify as a small company and avail of this exemption, a company must satisfy TWO or more of the following conditions in the current financial year and in the preceding financial year (unless it is its first financial year)(s.350(2), (3) & (5) Companies Act 2014):
(Exemption is not available to public companies except CLGs (Companies Limited by Guarantee)).
Small companies who claim the “size/ abridgment exemption” are required to file:
Small company “size/ abridgement exemption” statements:
A company claiming the “size/ abridgement exemption” must file the Auditor’s Report to the directors and must state the following on their Balance Sheet:
I/We, as director(s) of (company name), state that –
The company has relied on the specified exemption contained in section 352 Companies Act 2014; the company has done so on the grounds that it is entitled to the benefit of that exemption as a small company and confirm that the abridged Financial Statements have been properly prepared in accordance with section 353 Companies Act 2014.
On behalf of the board:
TYPED Name of Signatory: TYPED Name of Signatory:
Director Director
Date Date
Link to Resignation of an Auditor
Exemption from filing an auditor’s report (the “audit exemption”)(s.360 CA 2014)
Small Company Audit Exemption
In order for a company to qualify for the small company audit exemption the company must meet the following criteria in respect of the financial year concerned and the preceding year – s.350(3) CA 2014.
The company must qualify as a “small company”. The company must not come within any of the 18 classes of companies listed in the Fifth Schedule to the 2014 Act. The company’s annual return, to which Financial Statements are attached, must be filed on time for the year in question and the previous year. (s.363 CA 2014)
Small companies who claim both the audit and abridgement exemptions are required to file:
Sample Statement to be included on Balance Sheet when claiming BOTH audit exemption and the small company (abridgement) exemption:
I/We, as director(s) of (company name), state that:
(a) the company is availing itself of the exemption provided for by Chapter 15 of Part 6 of the Companies Act 2014,
(b) the company is availing itself of the exemption on the grounds that the conditions specified in s.358 are satisfied,
(c) the shareholders of the company have not served a notice on the company under s.334(1) in accordance with s.334(2),
(d) we acknowledge the company’s obligations under the Companies Act 2014, to keep adequate accounting records and prepare Financial Statements which give a true and fair view of the assets, liabilities and financial position of the company at the end of its financial year and of its profit or loss for such a year and to otherwise comply with the provisions of Companies Act 2014 relating to Financial Statements so far as they are applicable to the company,
*(e) the company has relied on the specified exemption contained in s.352 Companies Act 2014; and has done so on the grounds that the company is entitled to the benefit of that exemption as a small company and the abridged Financial Statements have been properly prepared in accordance with s.353 Companies Act 2014.
On behalf of the board:
TYPED Name of Signatory: TYPED Name of Signatory:
Director Director
Date: Date:
(*In the above statement, use sections (a) – (d) if claiming audit exemption and add section (e) if claiming the small company/abridgement exemption. A small company can claim either or both exemptions in their Financial Statements if they qualify.)
What must the company do before claiming audit exemption?
In deciding if they want to have the audit in respect of a financial year, they should consider the fact that third parties connected with the company (e.g. bankers or trade organisations) may still require an audit to be completed.
Furthermore, if one or more of the company’s shareholders representing not less than 10% of the voting rights (one member for a guarantee company CLG) request that the company not avail itself of the exemption and serve notice in writing to this effect on the company in the financial year immediately preceding the financial year concerned or during the financial year concerned but not later than one month before the end of that year, the company must have an audit. (s.334, CA 2014).
If the Directors of a dormant company decide to claim audit exemption in respect of a financial year, they must make the decision in that financial year and record the decision in the minutes of the meeting concerned (s.365(1) CA 2014).
What happens if the company loses the audit exemption by filing late?
If an annual return is filed late, the company loses the entitlement to claim the audit exemption in the following two years – Section 363 Companies Act 2014 as amended by section 10 Companies (Statutory Audits) Act 2018.
What happens if a company ceases to comply with the qualifying conditions during the course of a financial year in respect of which it is intended to claim the audit exemption?
The directors have a duty to appoint an auditor to the company as soon as may be after the company ceases to comply with the qualifying conditions
Audit Exemption applies to any group company if the group as a whole qualifies as a Small Group. The entire group and all its subsidiary undertakings must, taken as a whole, satisfy two of the following 3 conditions in order to claim a Group Company Audit Exemption:
The above conditions must be met in the year (the conditions must also be met in the preceding year unless it is the holding company’s first financial year.) (s359 (5) CA2014).
In relation to the aggregate figures for turnover and balance sheet total—
‘net’ means after set-offs and other adjustments made to eliminate group transactions—
(i) in the case of Companies Act financial statements, in accordance with Schedule 4, and
(ii) in the case of IFRS financial statements, in accordance with international financial reporting standards;
‘gross’ means without those set-offs and other adjustments (section 280a Companies Act 2014)
The company’s annual return, to which Financial Statements are attached, must be filed correctly and on time for the year in question and the previous year (s.364 CA2014).
Audit exemption not available where a holding company or subsidiary undertaking falls within a certain category (s.362 CA 2014)
A holding company and the other members of a Group are NOT entitled to the Small Group audit exemption if the company is a company falling within any provision of Schedule 5, other than a company referred to in paragraph 5 or 16 of Schedule 5 or a securitisation company (s.362(2) CA 2014).
Most companies in paragraphs 5 and 16 of Schedule 5 will be Designated Activity Companies (DACs) and since s.994 CA 2014 dis-applies Part 6 CA 2014, to all DACs that are credit institutions or insurance undertakings, they are not entitled to claim audit exemption under Part 6.
Link to Resignation of an Auditor
What is a securitisation company?
A securitisation company is a company that qualifies as such within the meaning of s.110, Taxes Consolidation Act 1997, or as a Financial Vehicle Corporation (FVC). If pre-1 January 2005, see Article 1 (1) Reg(EC) no. 24/2009 of ECB. If after 1 January 2005: see Article 1(1) Reg(EU) no. 1075/2013 of ECB.
Where notice is served under section 334 for Small Group
Group Company Audit Exemption Statement
Where the exemption is being availed of, the following statements must be included on the company’s balance sheet by the directors of the company – s.358 CA2014, is quoted for non-Group, s.359 CA2014 for Group:
We, the directors of (company name) state that –
(a) “that the company is availing itself of the exemption provided for by Chapter 15 of Part 6 of the Companies Act 2014” (these specific words must be used),
(b) the company is availing itself of the exemption on the grounds that section 359 is complied with
(c) “no notice under subsection (1) of section 334 has, in accordance with subsection (2) of that section, been served on the company” (objection of members), and
(d) the directors acknowledge the obligations of the company under the Companies Act 2014 to –
(i) keep adequate accounting records and prepare Financial Statements which give a true and fair view of assets, liabilities and financial position of the company at the end of the financial year and of its profit or loss for such a year, and
(ii) otherwise comply with the provisions of the Companies Act 2014 relating to Financial Statements so far as they are applicable to the company.
*(e) the company has relied on the specified exemption contained in s.352 Companies Act 2014;
has done so on the grounds that the company is entitled to the benefit of that exemption as a small company and the abridged Financial Statements have been properly prepared in accordance with s.353 Companies Act 2014.
On behalf of the board:
TYPED Name of Signatory: TYPED Name of Signatory:
Director Director
Date: Date:
(*In the above statement, use sections (a) – (d) if claiming audit exemption and add section (e) if claiming the small company/abridgement exemption. A small company can claim either or both exemptions in their Financial Statements if they qualify.)
(s.365, CA2014)
The Dormant Company Audit Exemption is NOT specific to company size. A company can qualify to claim audit exemption based on the fact that it is dormant.
The directors of the company must
(i) be of the opinion that in respect of the financial year concerned, the company is dormant and will satisfy the conditions specified at (a) and (b) below, and
(ii) decide that the company should avail of the exemption in that year (and record that decision in the minutes of the meeting concerned):
(a) it has no significant accounting transaction (ie. a transaction that is required by s.281 and s.282 Companies Act 2014, to be entered in the company’s accounting records); and
(b) its assets and liabilities comprise only permitted assets and liabilities (ie. investments in shares of, and amounts due to or from, other group undertakings).
In determining whether or when a company is dormant for the purposes of s.365, the following shall be disregarded:
(a) any transaction arising from the taking of shares in the company by a subscriber to the constitution as a result of an undertaking of his or her in connection with the formation of the company;
(b) any transaction consisting of the payment of—
(i) a fee to the Registrar on a change of the company’s name;
(ii) a fee to the Registrar on the re-registration of the company; or
(iii) a fee to the Registrar for the registration of an annual return (including any fee of an increased amount by virtue of regulations under section 889(6)).
The right of members to dissent to the audit exemption does not apply to a dormant company (s.334(5)CA2014).
Dormant company audit exemption – statements to be included on balance sheet (s.365):
Where the dormant company exemption is being availed of, the following statements must be included on the company’s balance sheet by the directors of the company:
I/We, as director(s) of (company name) state that:
(a) the company is availing itself of the audit exemption provided for by Chapter 16 of Part 6 of the Companies Act 2014;
(b) the company is availing itself of the exemption on the grounds that the conditions specified in s.365(2) are satisfied;
(c) we acknowledge the company’s obligations under Companies Act 2014, to keep adequate accounting records and to prepare Financial Statements which give a true and fair view of the assets, liabilities and financial position of the company at the end of its financial year and of its profit or loss for such a year and to otherwise comply with the provisions of Companies Act 2014 relating to Financial Statements so far as they are applicable to the company;
(d) we hereby certify that we have relied on the specific exemption contained in s.365 Companies Act 2014 on the grounds that the company is entitled to the benefits of that exemption as a dormant company.
*(e) the company has relied on the specified exemption contained in s.352 Companies Act 2014; has done so on the grounds that the company is entitled to the benefit of that exemption as a small company and the abridged Financial Statements have been properly prepared in accordance with s.353 Companies Act 2014.
On behalf of the board:
TYPED Name of Signatory: TYPED Name of Signatory:
Director Director
Date: Date:
(*In the above statement, use sections (a) – (d) if claiming audit exemption and add section (e) if claiming the small company/abridgement exemption. A small company can claim either or both exemptions in their Financial Statements if they qualify.)