Companies Act 2006

479 Availability of small companies exemption in case of group company

(1) A company is not entitled to the exemption conferred by section 477 (small companies) in respect of a financial year during any part of which it was a group company unless—

(a) the conditions specified in subsection (2) below are met, or

(b) subsection (3) applies.

(2) The conditions are—

(a) that the group—

(i) qualifies as a small group in relation to that financial year, and

(ii) was not at any time in that year an ineligible group;

(b) that the group’s aggregate turnover in that year is not more than £5.6 million net (or £6.72 million gross);

(c) that the group’s aggregate balance sheet total for that year is not more than £2.8 million net (or £3.36 million gross).

(3) A company is not excluded by subsection (1) if, throughout the whole of the period or periods during the financial year when it was a group company, it was both a subsidiary undertaking and dormant.

(4) In this section—

(a) “group company” means a company that is a parent company or a subsidiary undertaking, and

(b) “the group”, in relation to a group company, means that company together with all its associated undertakings.

For this purpose undertakings are associated if one is a subsidiary undertaking of the other or both are subsidiary undertakings of a third undertaking.

(5) For the purposes of this section—

(a) whether a group qualifies as small shall be determined in accordance with section 383 (companies qualifying as small: parent companies);

(b) “ineligible group” has the meaning given by section 384(2) and (3);

(c) a group’s aggregate turnover and aggregate balance sheet total shall be determined as for the purposes of section 383;

(d) “net” and “gross” have the same meaning as in that section;

(e) a company may meet any relevant requirement on the basis of either the gross or the net figure.

(6) The provisions mentioned in subsection (5) apply for the purposes of this section as if all the bodies corporate in the group were companies.