Accountant For
Dormant Company

Whether you already have a dormant company or you are planning to register one as dormant, our dormant company accounts service can offer advice and support. We will also prepare your accounts for you and make sure they are sent to Companies House on time.

Here are some of our areas of expertise, along with some relevant information to help you out.

By law, all limited companies in the UK must deliver annual accounts, along with a confirmation statement, to Companies House whether they are trading or not, and this includes dormant companies.

Some directors or business owners choose dormant status to protect a trading name while they are launching their business, as this prevents others from using the same name (sole traders are also allowed to do this). It is also a method used during a restructuring program, or simply to set up a company that will become active in the future.

Companies House Rules

For the purposes of Companies House, dormant means that the company has no significant accounting transactions.

In simple terms, this means that the company has not received any interest on any bank accounts, paid employees, paid bank charges or paid an invoice, however large or small the amount might be.

However, the following items aren't included in the significant accounting transaction category:

Filing Fees

Filing fees paid to Companies House for items such as a confirmation statement or change of details (such as changing a business name).

Registration Fees

Any fees payable for re-registering a company.

Penalties

Penalties connected with accounts money paid do not qualify as significant trading transactions. This includes items like late filing penalties (fines paid to Companies House for sending your dormant company accounts after the deadline).

Share Payments

Share payments made to shareholders (subscribers) after the incorporation of the company.

If you need advice or clarification on any of the above points, call Auditox Accountancy today and speak to our specialist accountants for dormant accounts!

HMRC Rules

To make things interesting, HMRC has its own definition of a dormant company. According to their rules, a dormant company is one that is completely non-trading.

To make sure you stay within the rules, it's best to define it this way: a dormant company is one that has either not started trading yet, or that hasn't performed any significant accounting transactions or generated any income within the past financial year.

Under the current legislation, only a limited company* can become dormant. It is not possible for Limited Liability Partnerships (LLPs) to register as dormant companies.

Anyone from the company can file accounts, but they must bear the director's signature. However, both HMRC and Companies House take the role of directorship very seriously, and there can be severe penalties for any perceived wrongdoing, lapses of judgement or dereliction of duty.

A director is legally responsible for running the company and ensuring that all accounts are prepared and submitted on time.

For this reason, although you can usually avoid the need for an audit during your period of dormancy, it's advisable to secure the services of a professional accountancy company, like Auditox, to check that everything is in order. We can also process the forms for you if you wish.

*Although there are four different types of limited companies in the UK, 'companies limited by shares' are the most common by far, followed by 'companies limited by guarantee'.

The only action you need to take is to send dormant company accounts to Companies House. These are a simple form of annual accounts, and they don't need a directors' report or profit and loss statement.

However, they do need to include the following:

• The full company name, followed by Ltd (or Limited) - this might seem insignificant, but it's an important legal detail.
• The company registration number.
• A dated balance sheet with a director's name and a statement showing that the company was dormant throughout the last financial year.
• Accompanying explanatory notes, where necessary.
• Profit and loss accounts figures from previous years - if applicable.

As you can see, filing dormant accounts with Companies House is an easier process than the usual statutory accounts. Even so, it has to be handled correctly and processed on time to avoid late filing penalties.

How Do You File Dormant Company Accounts?

It is possible to file dormant company accounts using the Companies House online service. A form is available to download, but it is likely that this will be withdrawn in the near future as the government seeks to make the system more efficient through initiatives like Making Tax Digital.

How Long Does It Take To File Dormant Accounts?

If you provide all of the necessary information, there's no reason why your dormant company accounts shouldn't be completed and submitted within 24 hours.

Do You Need To Advise Companies House If You Start Trading Again?

No - this is not necessary. You can simply submit your statutory accounts as normal, and the dormant status will automatically be revoked.