Dormant Companies - Company Formation Related Services

Dormant companies are those which are judged to have had no significant accounting transactions in their financial period. The term no significant transactions generally equates to their being no items which are required to be listed in the company' internal accounting records.

There are a few transactions which may take place in an accounting period but which do not represent "accounting entries". These essentially are the amounts which may be received from shareholders as part of the purchase by them of the company's shares, amounts payable to Companies House for the annual return fee, and other fines and penalties which may be incurred in the event of non submittal of ay of the forms required by the Registrar of Companies.

A dormant company is not the same as a company that is non trading. Whilst a non trading company will not trade as such, it will have various entries in its accounting records which do not fall in to any of the categories above. Thus this makes it separate and distinct from a dormant company.

People sometimes form a company with the express wish that the company remains dormant at least in the short term. Some common reasons are:

to secure a company name
to prepare for a future contract
to acquire property

Company formation agents are usually used to set up companies. The entities start off dormant as by definition they have not yet starting to trade. Their status does not change until they enter in to transactions at which point their status automatically changes to trading. Should the company not trade in an accounting period or not trade at all in any period, accounts still have to be prepared and filed at Companies House, just as any other company would have to.

The personnel requirements for dormant companies are the same as other for any company. They must have a minimum of one director and a separate secretary if their is only one director Our post formation details the various duties and role of directors and secretaries as they apply to any UK limited company.

If it is deemed the the company is not needed, the directors can apply for it to be dissolved voluntarily. Fir a dormant company the procedure id quite straight forward.

Do call us if you would like further help or advice on this subject.