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Under the 4th and 7th Company Law Directives, also known as the Accounting Directives, Member States have the option of granting SMEs exemptions from certain financial reporting and disclosure requirements usually imposed on limited liability companies.
In addition, Member States may exempt small though not medium-sized - companies from publishing a profit and loss account or an annual report, from disclosing certain types of information in their accounts and from having their accounts audited.
The definitions of SMEs in the Fourth Company Law Directive and the thresholds therein are for accounting purposes only. To qualify under the Directive as either a 'small' company or a 'medium-sized' one, there are three criteria, of which companies must meet at least two.
Council document
commission Press release