The formation process for a dormant company is no different from that of any other normal business incorporation.
Companies House does not distinguish between registration applications relating to non- trading dormant companies and those which relate to the set-up of other entities which will engage in some form of business or commercial activity.
The simple rule to remember is that all companies are dormant at the time of their incorporation. This is true irrespective of what their status may or may not change to in the future. At the moment a company is registered, it has not yet traded and therefore is dormant..
The phase dormant company formation therefore strictly relates to all incorporations.
Keeping a Company Dormant
As all companies are dormant by default, maintaining that status is simply a matter of not trading. In the absence of any noticeable business activity, the company will continue to be dormant indefinitely.
The definition of what constitutes noticeable business activity is generally any transaction which is undertaken for a purpose other than to satisfy the company’s statutory obligations.
Items such as annual return filling fees and expenses incurred in the preparation and maintenance of statutory books and accounts are unlikely to be classed as business activities.
What do Dormant Companies have to file?
Dormant companies still have some statutory obligations to attend to. These however are quite simple compared to entities which trade. The following duties exist for UK dormant companies:
- The filing of the annual return. For dormant companies this is a simple case of confirming the information present on-screen and paying the £15 filing fee.
- Submitting dormant company accounts. This again can be executed online free of charge at Companies House and as there are no transactions, the number of entries required is normally limited to one or two.
Summary:
The following are some important points to note relating to dormant company registration:
- Dormant is the default status for all UK companies.
- There is no time restriction on how long a company may remain dormant.
- Changing a company from dormant to trading is automatic as soon as business activities commence.
- Dormant company formation involves the same process as with any other incorporation.
The Qoppa Company Formation Package provides everything that is required to form a dormant company and costs just £24.99.
