Dormant companies summary

Why would you want a dormant company, and are there any requirements associated with one?

Just sleeping

A dormant company is one that is does not trade, so why keep it on the register? Sometimes it’s accidental - a business fizzles out, key management move on to something else or retire and the company is left without assets or a purpose. In this situation, the company will usually be struck off and dissolved (see our Striking Off and Dissolution Summary).

In some circumstances the directors may decide to keep it on the back burner, perhaps to preserve the company’s name or because there is a chance that they will re-activate the company at some point in the future.

Requirements

Companies House and HMRC have slightly different definitions of a dormant company, so it’s important to know what your obligations are in both respects. Even while dormant, Companies House imposes some basic filing requirements and the usual penalties apply for failure to comply. HMRC does not have filing requirements for dormant companies, but you will have to inform it that your company is dormant and, of course, if it starts trading again.