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UK Dormant Company

UK Dormant Company

Dormant Company – Companies House

A UK company without any activity is often referred to as dormant. A company is dormant for Companies House, if it has had no significant transactions during the year on which it is reporting.

This effectively means a company that has never traded, and has never bought any assets and  is different from a non-trading company; which has other obligations.

If a company has no assets, and only pays

  • filing fees
  • money paid for the transfer of shares

You must file your confirmation statement (previously annual return) and annual accounts with Companies House even if your limited company is dormant according to Companies House.

Dormant according to Companies House

Your company is called dormant by Companies House if it’s had no significant transactions in the financial year. Significant transactions don’t include:

  • Filing fees paid to Companies House
  • Penalties for late filing of accounts
  • Money paid for shares when the company was incorporated

You do not need to tell Companies House if your dormant company starts trading, the next set of non-dormant accounts that you file will show that your UK company is no longer dormant.

Non-Dormant UK Company

If assets were bought, or the company has opened a bank account, or the company did trade then the company is not dormant, it is non-trading so it can file abbreviated accounts, but not dormant accounts.

If a company is not correctly maintained, there can be penalties for directors of UK companies and fines unpaid by a company, can result in personal liability for the directors, even if they are not resident in the UK.

Dormant Company for the Tax Authorities

A company is dormant for tax purposes if it has never traded, has no assets and has written to the authorities to say that it is dormant; and they have replied acknowledging this.

All other companies are active and have to lodge tax returns.:

A company is active for Corporation Tax purposes, whether it is trading, or practising a profession, or holds any assets which have the potential to generate an income, even if the income is collected by another party.