Many people around the UK are running their own businesses and in many cases such enterprises are controlled and developed only by the efforts of one person. Such activities are usually called micro business. There is no need for big capital and a large group of employees for this, all vital processes can be performed in one place or even remotely and cost of operations is also very low. However, despite the fact of exceptionally small size in comparison to the market participants there is a necessity to register the enterprise according to the government rules. Of course, all situations are described on a regulator website and in order to become a business person an individual should find out how a planned project can be classified.
The main characteristics
According to the last updates micro entity accounts can be used for companies where the following signs of micro business are obvious:
its turnover is smaller than £600,000;
actual balance sheet shows that company has less than £310,000;
the total number of employed workers is less than 10.
Any of these characteristics allows to characterise a firm as a micro business. Due to the size an enterprise can count on some privileges that will simplify the reporting processes as well as entire accounting. For example business person will have the right to:
send report that includes minimum information related to the company’s activities;
show only information connected with balance sheet;
simultaneously get all benefits that are available to small enterprises.
It is worth to pay attention to the type of the company because not all variants are allowed to use simplified methods of reporting. Non-profit organisations and financial institutions can’t be the subject of this rule. Depending on the situation micro entity accounts will help to save time and money on preparation of statements.