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

By Ben Davies · Updated 26 September 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 entity types can't be micro-entities at all — charities, credit and insurance institutions, investment undertakings, and any company or LLP preparing or included in group accounts. Those use FRS 102 1A or full accounts regardless of size. LLPs themselves have been able to use the regime since 2016 (the Limited Liability Partnerships, Partnerships and Groups (Accounts and Audit) Regulations 2016).

Where DormantFile fits

DormantFile files micro-entity (FRS 105) accounts for non-trading companies and LLPs — the common case where the only thing on the books is a loan being repaid, and (for a company) the CT600 shows no tax to pay. 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 and LLPs; small-company and full accounts need an accountant.