Micro-entity vs small company accounts: which should you file?

By DormantFile · Updated 1 June 2026

If your company is too active to be dormant but still small, it files one of two simplified account types: micro-entity accounts under FRS 105, or small company accounts under FRS 102 Section 1A. They sit on a ladder — micro-entity is the smallest and simplest, small company is one rung up — and which you can use comes down to size.

The size thresholds

A company is a micro-entity if it meets at least two of three limits; it's a small company if it exceeds the micro limits but meets at least two of the (higher) small limits. The figures stepped up for accounting periods beginning on or after 6 April 2025:

(For periods beginning before 6 April 2025 the micro limits were £632,000 / £316,000 / 10, and the small limits £10.2m / £5.1m / 50.) You can check where your company lands with the free micro-entity eligibility checker.

What each one contains

• Micro-entity (FRS 105): the bare minimum — a short balance sheet, a couple of statements, and the director's approval. No directors' report, almost no notes, and the profit and loss account doesn't have to be filed. Assets are held at cost; there's no fair-value or revaluation accounting.
• Small company (FRS 102 1A): still simplified, but with more — selected notes, accounting policies, and the option (not requirement) of a directors' report. It allows accounting treatments FRS 105 does not, such as revaluing assets.

Both qualify for audit exemption at these sizes.

Which should you choose?

If you qualify as a micro-entity, you can choose either standard — being eligible for FRS 105 doesn't force you onto it. In practice:

• Choose micro-entity (FRS 105) if the company's affairs are genuinely simple and you want the least possible disclosure. A non-trading company — for example one repaying a Bounce Back Loan — is the textbook case.
• Choose small company (FRS 102 1A) if you need a treatment FRS 105 doesn't allow (such as revaluing property), if a lender or investor expects fuller accounts, or if you're likely to grow past the micro limits soon and want consistency.

A few company types can't be micro-entities at all — charities, LLPs, financial and insurance companies, and any company preparing or included in group accounts. Those use FRS 102 1A or full accounts regardless of size.

Where DormantFile fits

DormantFile files micro-entity (FRS 105) accounts for non-trading companies — the common case where the only thing on the books is a loan being repaid, and the CT600 is nil. It does not file small-company (FRS 102 1A) or full accounts; if your company is trading or needs the extra disclosure, use an accountant. If it's genuinely just the loan, see how it works.

Key points

• Micro-entity (FRS 105) and small company (FRS 102 1A) are two tiers of simplified accounts; size decides which you can use.
• Micro limits (periods from 6 April 2025): turnover ≤ £1m, balance sheet ≤ £500k, ≤ 10 employees — meet at least two.
• Micro-entity accounts are the simplest: short balance sheet, no filed profit and loss, minimal notes.
• Being eligible for FRS 105 is a choice, not an obligation — you can use FRS 102 1A instead.
• DormantFile files micro-entity accounts for non-trading companies; small-company and full accounts need an accountant.