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Protecting your trademark: Do you have a trademark or brand name you wish to protect? Securing a dormant company of “brand name limited” will prevent competitors from using the same brand name for unscrupulous reasons. Preparing for the future: You may not yet be ready to push ahead with a new project. By securing a dormant company, you can help prepare in advance for the future. A dormant company can be one that has never traded, and there is no time limit for keeping a company in a dormant status. On a break? By making the company dormant, you can always continue the business at a later date, and you won’t need to go through the administrative process of closing down your limited company or even creating a new one should you decide to start trading again. However, all dormant accounts must complete their annual returns to the Companies House. St Matthew eAccounting will make sure you fill out the correct forms with the relative information required. What classifies a company as a dormant company?The term dormant applies to a company that has no significant accounting transactions during a financial year. No significant accounting transactions means no entries in the company's accounting records. The amount paid for shares when the company is first formed and a few costs that the company may incur in order to keep the company registered at Companies House do not count as significant accounting transactions. Dormant or Non-trading? It is not the same as a non-trading company, a term that has no legal meaning. A company can be non-trading in the sense that it is not doing business. However, it may still have other accounting transactions going through its books, which means that it is not dormant in a legal sense. A dormant company must not have any accounting transactions except specific allowable transactions that can be disregarded. As the company is non-trading, it is required to file Dormant Accounts annually to Companies House. Dormant accounts show very little financial data except for assets and shares held. If the company becomes active again, it will be required to file normal Annual Accounts again. Due to the lack of financial data, a dormant company will not be assigned a credit score or limit, also there will be little company information.
Financial transactions that do not affect the submitting of dormant company accounts are: - payment for shares taken by subscribers to the memorandum of association
- fees paid for a change of company name
- the re-registration of a company and filing of annual returns
- payment made because of penalties incurred due to late filing
Dormant company accounts do not have to include a profit and loss account and can be very brief, particularly if the company has been dormant since incorporation.
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