The UK company law defined a limited company as a dormant company if it has no significant business accounting transactions during its accounting period. If your limited company merely has the following transactions during its accounting period then it is classified as a dormant company.
- Monies received from shareholders for the shares issued to them as per the company memorandum of association.
- Statutory fees paid to Companies House for filing of Confirmation statement, company name change and re-registration of your company.
- Late filing penalty payment made to the Registrar of Companies for late filing of company accounts.
If your limited company is registered with no intention to carry out business since its incorporation, your company is considered a dormant company and you are eligible to file a dormant accounts with Companies House.
If your limited company have any other transactions during its accounting year, you are not eligible to file dormant account.
Companies House will issue late filing penalty if your dormant account is filed its account late for even just one day.
When submitting your Confirmation statement with Companies House, you would specify your principal business activity is a dormant company.
You many be wondering why people want to setup a company and not use it for business? Many entrepreneurs register a dormant limited company sometime it is just to keep it for future business idea or protect their business names from being registered by someone else or their competitors.