Companies House provides guidance on the processes and requirements
If you have a limited company, you must send annual accounts and a confirmation statement to Companies House every year, even if you don't trade or make any money. This applies to dormant companies as well.
A company is 'dormant' if it has no business activity and no other income, such as from investments. However, being dormant for Corporation Tax and Company Tax Returns is different from being dormant for Companies House.
You don't have to pay Corporation Tax or file another Company Tax Return for your dormant company if you tell HMRC that it's dormant, unless they ask you to do so. But you still have to file a confirmation statement and annual accounts with Companies House.
Companies House considers a company 'dormant' if it has no 'significant accounting transactions' in the accounting period. A significant accounting transaction is something that the company should record in its books.
Significant transactions don't include:
- fees paid to Companies House for filing
- penalties for filing accounts late
- money paid for shares when the company was set up.
If your company is dormant and also 'small', you can file 'dormant accounts' and you don't need to include an auditor's report with your accounts.
Rachel Roberts, who leads compliance and enforcement at Companies House, says: 'Some directors think that they don't have to send accounts to Companies House if their company is dormant for HMRC. This is not true.'
The legal obligations of a company's directors include managing the company and ensuring that the company's accounts and reports are accurate and timely. Even if a company is dormant and does not engage in any business activity or receive any income, it still has to file annual accounts and confirmation statements with Companies House every year.
'We aim to maintain trust and confidence in our registers and data, and therefore the quality of information on the register is crucial.'
WebFiling provides a convenient online template that allows dormant companies that have never traded to submit their accounts electronically. This service is available for both companies limited by shares and companies limited by guarantee.
The system has built-in checks to help the dormant company verify that it has not missed any essential information. More guidance on how to file dormant accounts online can be found in our YouTube video and online guidance.
Filing dormant accounts is free of charge, but penalties may apply if the dormant company fails to file on time. Directors should be aware of their responsibilities as failure to comply can result in a fine and, in severe cases, the company being removed from the register.
A company does not have to inform Companies House if they resume trading. The next set of non-dormant accounts that they file will indicate that the company is no longer dormant.
If a dormant company is no longer required, directors can opt to close their company using the new Companies House online service to apply for strike off and dissolution.
