A dormant limited company is a company that has been registered with the government's Companies House but is not currently trading or carrying out any significant business activities. Essentially, it is a company that has been set up and registered but is not actively operating or generating any income. While a dormant company is not engaged in any business activities, it still has to comply with certain legal and financial obligations, such as filing annual accounts and confirmation statements with Companies House.
A dormant company may be useful for various reasons, such as protecting a company name or brand, or holding assets for future use.It is important to note that a dormant company is not the same as an inactive company. An inactive company is one that has ceased trading or business activities but still has assets and liabilities, whereas a dormant company has no significant assets or liabilities and is not engaged in any business activities.
A company is called ‘dormant’ by Companies House if it’s had no ‘significant accounting transactions’ during the accounting period. A significant accounting transaction is one which the company should enter in its accounting records.
Significant transactions do not include:
- filing fees paid to Companies House
- penalties for late filing of accounts
- money paid for shares when the company was incorporated.