What Is a Dormant Company?
A company is considered dormant by Companies House if it:
- Has had no significant accounting transactions during the financial year
- Has not traded, issued dividends, paid bank fees, or earned revenue
A dormant company may still be active in other ways (e.g. holding assets or intellectual property), but for accounting purposes, it has no “significant” financial activity.
Note: A company can be dormant with Companies House but not with HMRC, depending on past or ongoing tax activity.
Why Keep a Company Dormant?
There are several legitimate reasons to keep a company dormant:
- You plan to launch at a future date but want to secure the name now
- You are pausing operations temporarily
- You’re maintaining the company to hold assets or trademarks
- You want to keep the structure intact for potential reactivation
Dormancy allows you to reduce administrative costs and obligations while maintaining the legal existence of your company.
What Must a Dormant Company File?
Even dormant companies must file:
- A Confirmation Statement – confirming that company details are current
- Dormant Company Accounts – simplified financial statements
These filings are typically due annually, based on your company’s incorporation date. Dragonfly Associates provides filing support for dormant companies, including preparation of dormant accounts and deadline tracking, depending on your service package.
What Do Dormant Accounts Include?
Dormant accounts are simpler than full accounts. They typically consist of:
- A balance sheet showing zero or minimal activity
- A declaration that the company is dormant
- Confirmation that no significant accounting transactions took place
There is no need to submit a profit and loss account or auditor’s report for dormant companies. We prepare and file dormant accounts for clients under compliance or accounting agreements.
What Is Considered a “Significant Accounting Transaction”?
Any of the following would make a company active for accounting purposes:
- Sale of goods or services
- Bank interest, fees, or charges
- Paying salaries or expenses
- Issuing dividends
- Loan repayments or interest
Activities such as paying Companies House filing fees or penalties are not considered “significant.” If any of these transactions occur, the company is no longer dormant and must file full accounts. We can advise you if you’re unsure.
Dormancy vs Dissolution
Dormant status allows you to keep the company alive with minimal costs. Dissolution is the process of closing the company permanently.
You might choose dormancy if:
- You want to relaunch later
- You’re undecided about the future
- You want to protect a brand or business name
We can help assess whether dormancy or dissolution is the better path for your situation, depending on your goals and company history.
Frequently Asked Questions
Can I make my company dormant after trading?
Yes. You must cease all significant transactions and inform HMRC that the company is no longer trading. We can guide you through the transition process.
Do I still need to submit a Confirmation Statement?
Yes. Dormancy affects accounts but not the requirement to confirm company details annually.
Can a dormant company still own assets?
Yes. A dormant company can hold property, IP, or shares, but must not actively manage or derive income from them.
Stay Compliant While Dormant
Filing dormant accounts may be simple—but failing to file them on time can result in penalties or even strike-off proceedings.
Dragonfly Associates supports dormant companies with annual filings and compliance monitoring, delivered under agreed service plans.
If your business is paused but not done, we’ll help you keep it compliant and ready for reactivation when the time is right.
