Limited Companies are registered for a variety of reasons. Sometimes there is an immediate need to trade. Sometimes the objective is to try and protect the name by registering it before someone else does. Sometimes a company will be needed in the future but may not trade for over a year. A limited company may be a dormant company.
You can now register a dormant limited company in less than 10 mins, entirely online using our website.
A trading company is required to file accounts with Companies House, with the specific requirements depending on its size. A trading company must also file a corporation tax return with HMRC and pay corporation tax if due. There are various financial penalties applied from both Companies House and HMRC for late filing of such documents. Companies House can also prosecute directors in cases of non-filing and may even strike the company off the register and dissolve it, leading to company bank account being frozen and assets being passed to the crown!
A dormant company has less requirements. In order to be dormant, the company must not trade during its financial year.
A dormant company must still file an annual conformation statement and pay an annual £13 fee to Companies House. The confirmation statement is very different to accounts and confirm the company information held is correct – for example registered office address and shareholders.
A dormant company must ensure they comply with registering changes to offices and PSC’s (persons of significant control) for example, a new director or PSC must be notified to Companies House within 14 days of appointment/becoming a PSC. You can learn more about PSC from my previous article
The crucial difference between a trading company and a dormant company is that a dormant company can file dormant accounts. This is a much more simplified document which requires very basic company information on company assets.
To ensure HMRC to not pursue a dormant company for tax returns it is prudent to write to them to explain the company is dormant. A company that has previously traded may write to HMRC to confirm it is becoming dormant, thus not requiring to submit tax returns moving forward. However, the company must still file a tax return for any trading period and pay any corporation tax due.
We can quote to provide a cost-effective dormant accountancy service, to cover the dormant company accounts and other legal requirements mentioned above.
Should a dormant company be no longer needed then it may file a DS01 form with HRMC to apply to be struck off and dissolved, so long as it meets legal criteria for strike of e.g. not traded for 3 months and with no debtors. We suggest seeking advice regarding strike off process and legal requirements, and we can also quote to help with the paperwork for this process.
If you are looking to register a Dormant Company or have any further doubts, please feel free to write to us at Support@mintformations.co.uk or visit www.mintformations.co.uk/