205A. Certain companies exempt from obligation to appoint auditors Flashcards
205A. Certain companies exempt from obligation to appoint auditors
General overview
[205A.01] Section 205A provides that a dormant company or an exempt private company is exempted from audit requirements. Under the previous regime, an exempt private company with a revenue of $5 million or less is exempted from audit requirements. For all solvent exempt private companies, only a confirmation of solvency needs to be filed instead of full financials. This audit exemption helps save business costs for small businesses. However, the definition of an exempt private company excludes small companies which have a corporate body as a member. Hence, small companies which are part of a group structure would not qualify as an exempt private company. To address the issue, the Steering Committee adopted the practice of the UK, Australia and New Zealand by redefining a small company according to revenue, assets and number of employees: see the Report of the Steering Committee for Review of the Companies Act, April 2011, Chapter 4, paras 2–17.
