Dormant Limited Companies

Top Tips from Wisteria Chartered Accountants

What is a Dormant Limited Company?

A company that has had no accounting transactions and is not trading.

A company can be dormant from incorporation or can become dormant at a later date if appropriate.

Penalties for

late filing of

accounts

Companies can undertake the following and still be treated as dormant:

Payment for shares as stated in the Memorandum of Association

Fees paid for a change in company details

However care does need to be taken that absolutely no transactions take place.

For example, interest earned on monies held on deposit would be treated as an income and therefore the company would not be dormant.

If your company is dormant and won’t be trading this doesn’t mean that you don’t have any obligations. Some of these include:

Filing basic accounts.

Notifying the tax authorities of your activities every year.

Submitting a correct annual return.

If you do not fulfil your duties, your company may be struck off and you will be in breach of the law.

You are also required to keep the information registered at Companies House updated whether you are dormant or actively trading.

For example if there is a change in shareholding, the appropriate form must be sent to Companies House so that they can update their records.

If you begin trading, your company can no longer be regarded as dormant and you will have to file regular financial statements which are more complex.

Failure to do this within the timescale allowed by Companies House is a breach of the law and can result in monetary penalties.

Where can I go for more information?

For further information and to form your limited company visit Wisteria Formations at

www.wisteriaformations.co.uk .

Or contact us on:0844 893 0808

Email formations@wisteria.co.uk