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The directors' report for a small company

Every company prepares a directors' report for each financial year unless it qualifies as a micro-entity. For a small company the content is short, and under current law it need not be filed at Companies House.

Accountin · Last checked 2 October 2026

Who prepares one

Section 415 requires the directors to prepare a directors' report for each financial year. The duty does not apply to a company that qualifies as a micro-entity. A director who fails to take all reasonable steps to comply commits an offence.

A company entitled to prepare accounts under the small companies regime, or that would be but for membership of an ineligible group, is entitled to the small companies exemption for the directors' report (section 415A). The exemption takes away the dividend statement and affects what is filed.

What a small company's report contains

  • The names of everyone who was a director at any time during the financial year (section 416(1)).
  • Political donations and political expenditure, where the total in the year exceeded £2,000, with the name of each party, organisation or candidate and the amount given. A wholly-owned subsidiary of a UK company is outside this (SI 2008/409 Schedule 5 paragraph 2).
  • For an audited company only, a statement that so far as each director is aware there is no relevant audit information the auditor is unaware of, and that each director has taken the steps they ought to have taken (section 418).
  • The small companies exemption statement, where the exemption is used (section 419(2)).

What a small company leaves out

A company entitled to the small companies exemption does not state the amount the directors recommend as a dividend (section 416(3)). Companies House's guidance adds that a small company's report does not have to contain a business review (Companies House guidance).

The disclosure of the employment of disabled persons in Schedule 5 was removed from 6 April 2025, and the earlier paragraphs on charitable donations and acquisitions of own shares were removed in 2013.

Approval and signing

The board approves the directors' report, and a director or the secretary signs it on behalf of the board (section 419(1)). If the report takes advantage of the small companies exemption it must say so in a prominent position above the signature (section 419(2)). A director who knows the report does not comply, or is reckless about it, and fails to take reasonable steps to stop it being approved, commits an offence.

Every published copy states the name of the person who signed it on behalf of the board (section 433). Companies House asks for the signatory's printed name (Companies House guidance).

Filing the report now

Under the current text of section 444(1), a small company may deliver its directors' report to Companies House and does not have to. If it leaves the report out, the balance sheet carries the statement that the accounts and reports have been delivered under the provisions for the small companies regime. The members still receive the report with the accounts. See abridged and filleted accounts.

Filing the report from April 2028

The Economic Crime and Corporate Transparency Act 2023 requires a small company to file its directors' report, alongside the profit and loss account, for filings from 1 April 2028 (campaign site).

The same page says the government has announced that it intends to remove the requirement for any company to produce a directors' report, so the legislated filing requirement for small companies will no longer apply. This is an announcement. The legislation to remove the report had not been made when this was checked.

Questions

Does a micro-entity need a directors' report?

No. Section 415 does not apply to a company that qualifies as a micro-entity, and GOV.UK lists the directors' report as part of the accounts "unless you're a 'micro-entity'" (GOV.UK: prepare annual accounts).

Does an audit-exempt company include the statement on disclosure to auditors?

No. The section 418 statement applies to a company whose accounts are audited (section 418).

Who can sign the directors' report?

A director or the company secretary (section 419(1)). The balance sheet itself must be signed by a director. See approving and signing accounts.

In Accountin

In Accountin, the directors, the signing director and the approval date are entered once under Details for the accounts and carried into each copy.

Related guides

Year-end accounts and Companies HouseWhat a small company's statutory accounts containThe balance sheet, profit and loss account, notes, directors' report and statements in a small company's accounts, and which parts go to members.Year-end accounts and Companies HouseApproving and signing company accountsBoard approval of the accounts, the director's signature on the balance sheet, signing the directors' report, the statements above the signature, and filing dates.Year-end accounts and Companies HouseAbridged and filleted accounts for small companiesWhat abridged and filleted accounts are, the member consent and statement under section 444(2A), and how both options end for filings from 1 April 2028.Year-end accounts and Companies HouseCompanies House accounts changes in April 2028From April 2028 Companies House will take accounts only from software in iXBRL, small companies must file a profit and loss account, and abridged accounts end.

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