COMPANIES Introduction Citation, application and interpretation 1 1 These Regulations may be cited as the Companies (1986 Order) (Audit Exemption) (Amendment) Regulations (Northern Ireland) 2001 and shall come into operation on 13th April 2001. 2 These Regulations apply to annual accounts and reports in respect of financial years ending on or after 13th June 2001. 3 In these Regulations, “ 1986 Order ” means the Companies (Northern Ireland) Order 1986, and references to Articles or Schedules are to Articles of or Schedules to the 1986 Order. Audit Exemption Modification of Article 257A 2 1 Article 257A (exemptions from audit for certain categories of small company) is modified as follows. 2 In paragraph (3 b ) and (3A)( b ), for “£350,000” substitute “£1 million”. 3 In paragraph (6A), for “Article 258(1)”, substitute “Article 257AA(1)”. Insertion of new Article 257AA 3 The following Article shall be inserted after Article 257A. Dormant Companies 257AA 1 Subject to Article 257B(2) to (5), a company is exempt from the provisions of this Part relating to the audit of accounts in respect of a financial year if— a it has been dormant since its formation, or b it has been dormant since the end of the previous financial year and paragraph (2) applies. 2 This paragraph applies if the company— a is entitled in respect of its individual accounts for the financial year in question to prepare accounts in accordance with Article 254, or would be so entitled but for the application of Article 255A(1)( a )(i) or ( b ), and b is not required to prepare group accounts for that year. 3 Paragraph (1) does not apply if at any time in the financial year in question the company was— a a banking or insurance company, or b an authorised person for the purposes of the Financial Services Act 1986. 4 A company is “dormant” during any period in which it has no significant accounting transaction. 5 “Significant accounting transaction” means a transaction which— a is required by Article 229 to be entered in the company’s accounting records; but b is not a transaction to which paragraph (6) or (7) applies. 6 This paragraph applies to a transaction arising from the taking of shares in the company by a subscriber to the memorandum as a result of an undertaking of his in the memorandum. 7 This paragraph applies to a transaction consisting of the payment of— a a fee to the registrar on a change of name under Article 38 (change of name), b a fee to the registrar on the re-registration of a company under Part III (re-registration as a means of altering a company’s status), c a penalty under Article 250A (penalty for failure to deliver accounts), or d a fee to the registrar for the registration of an annual return under Chapter III of Part XII. . Modification of Article 257B 4 1 Article 257B (cases where exemption from audit not available) is modified as follows. 2 In paragraph (1A), for “Article 258” substitute “Article 257AA”. 3 In paragraph (1C)— a in sub-paragraph ( a ), after “Article 257” insert “(or if all bodies corporate in such group were companies, would so qualify)”, and b in sub-paragraph ( b )— i after “Article 257) is” insert “, where the company referred to in paragraph (1B) is a charity,”, and ii after “(or £420,000 gross)” insert “or, where the company so referred to is not a charity, not more than £1 million net (or £1.2 million gross)” 4 In paragraph (3), after “Article 257A” insert “or by paragraph (1) of Article 257AA”. 5 In paragraph (4)— a after “paragraph (1) or (2) of Article 257A”, insert “or by paragraph (1) of Article 257AA”, b in sub-paragraph ( a ), omit “(as the case may be)”, and after “Article 257A” insert “or paragraph (1) of Article 257AA”, and c for sub-paragraph ( b ) substitute— b to the effect that members have not required the company to obtain an audit of its accounts for the year in question in accordance with paragraph (2), and . Disclosure where Dormant Company Acting as Agent Additional disclosures in notes to accounts 5 1 Schedule 4 (form and content of company accounts) is amended as follows. 2 After paragraph 58 insert— Dormant companies acting as agents 58A Where the directors of a company take advantage of the exemption conferred by Article 257AA, and the company has during the financial year in question acted as an agent for any person, the fact that it has so acted must be stated. . 6 1 Schedule 8 (form and content of accounts prepared by small companies) is amended as follows. 2 After paragraph 51 insert— Dormant companies acting as agents 51A Where the directors of a company take advantage of the exemption conferred by Article 257AA, and the company has during the financial year in question acted as an agent for any person, the fact that it has so acted must be stated. . 7 1 Schedule 8A (form and content of abbreviated accounts of small companies delivered to registrar) is amended as follows. 2 After paragraph 9 insert— Dormant companies acting as agents 9A Where the directors of a company take advantage of the exemption conferred by Article 257AA, and the company has during the financial year in question acted as an agent for any person, the fact that it has so acted must be stated. . Minor and consequential amendments 8 1 In paragraph (9) of Article 254 (special provisions for small companies) , for the words from “the company” to the end, substitute “the directors of the company have taken advantage of the exemption from audit conferred by Article 257AA (dormant companies)”. 2 In paragraph (1) of Article 255B (special auditors' report) — a in sub-paragraph ( b ), after “Article 257A(1) or (2)” insert “or Article 257AA”, b omit “and” at the end of sub-paragraph ( b ), and c omit sub-paragraph ( c ). 3 In paragraph (3) of Article 257C (the report required for the purposes of Article 257A(2)) , omit from “(or, where the company is a charity,” to “that Article)”. 4 In paragraph (1) of Article 257E (effect of audit exemptions) , after “Article 257A(1)” insert “or 257AA(1)”. 5 After paragraph (1) of Article 257E insert— 1A Where the directors of a company have taken advantage of the exemption conferred by Article 257AA, then for the purposes of that Article the company shall be treated as a company entitled to prepare accounts in accordance with Article 254 even though it is a member of an ineligible group. . 6 Article 258 (resolution not to appoint auditors) is hereby repealed. 7 In paragraph 4( a ) of Article 297 (particulars of directors to be registered under Article 296) , for “Article 258(3)” substitute “Article 257AA(4)”. 8 In paragraph (2) of Article 394 (election by private company to dispense with annual appointment of auditors) , for paragraph ( a ) substitute— a the directors of the company have taken advantage of the exemption conferred by Article 257A or 257AA, or . 9 In paragraph (1) of Article 396A (certain companies exempt from obligation to appoint auditors) for “Article 258” substitute “Article 257AA”. 10 In paragraph 2(2)( a ) of Schedule 1 (particulars of directors etc to be contained in statement under Article 21) , for “Article 258(3)” substitute “Article 257AA(4)”. Sealed with the Official Seal of the Department of Enterprise, Trade and Investment on 3rd April 2001. Sir Reg Empey Minister for Enterprise, Trade and Investment