| > | | | | would also leave the directors open to penalty |
| Rules apply to dormant companies in the UK with | | | | fines and a potential criminal prosecution. |
| regard to accounting documents and submission | | | | If the dormant company is no longer required the |
| of information to companies house that needs | | | | directors can arrange for the company to be |
| attention even if the company has not traded | | | | dissolved by one of two methods dependent |
| during its financial year. Dormant companies risked | | | | upon whether the company has outstanding |
| being fined if these rules are ignored. | | | | financial affairs. If the company has no liabilities |
| A dormant company in the UK is defined as a | | | | then it may be able to apply to companies house |
| company that has had no significant accounting | | | | for a voluntary striking off and dissolution. If the |
| transactions during its financial year. It is not | | | | company has outstanding financial affairs then the |
| sufficient that the company may not have traded | | | | voluntary liquidation procedures need to be |
| if the company has had any accounting | | | | followed. |
| transactions at all with the exception of three | | | | The annual accounts a dormant company must |
| specific transactions that are allowed. | | | | submit to companies house each year consist of |
| Transactions regarded as allowable for the | | | | a balance sheet which also contains statutory |
| company to retain its dormant company status | | | | notes in compliance with the companies act. For a |
| are the amount received by the company in | | | | private company the annual accounts must be |
| respect of the first shares issued to the | | | | delivered within 10 months of the financial year |
| memorandum of association subscribers, the | | | | end, commonly called the accounting reference |
| annual filing fee payable to companies house and | | | | date and filed each year thereafter even if the |
| fines and penalties issued by companies house for | | | | company has never traded. |
| non filing of the annual return. | | | | The accounts of a dormant company can be filed |
| The term dormant company has legal significance | | | | online. |
| quite separate to a company which might be | | | | The annual accounts of a private dormant |
| described as a non trading company. The | | | | company do not have to be audited if exemption |
| difference being that a non trading company may | | | | is claimed and would normally consist of an |
| still have other financial transactions entered into | | | | abbreviated balance sheet with the statutory |
| its accounting records which even though not | | | | notes. The directors report and profit and loss |
| related t trading would disqualify that company as | | | | account are not required. If there has been any |
| a dormant company and the special rules | | | | accounting transactions that would have appeared |
| applicable to a dormant company. | | | | in a profit and loss account then the company |
| A company may be in a dormant state for a | | | | would be disqualified from being dormant except |
| number of reasons such as holding assets or | | | | for the exemptions stated above. |
| documents or merely protecting a trading name | | | | Companies house provide a standard form for |
| or perhaps plans to start a business have | | | | the submission of a dormant company accounts. |
| otherwise been delayed. | | | | While suitable for companies that have not traded |
| There is no limit on how long a company can | | | | this form may not be suitable for a company that |
| remain dormant however there are procedures | | | | has balance sheet entries from a previous years |
| which must be followed to avoid fines and keep | | | | trading activities when a more detailed balance |
| the company on the companies house register. | | | | sheet would be required. |
| Every dormant company must retain at least two | | | | The model set of balance sheets that a dormant |
| officers, a director and company secretary. | | | | might adopt are available from the companies |
| The directors are responsible for ensuring the | | | | house website and contain the statutory |
| dormant company submits the annual return, | | | | statements that should accompany the annual |
| form 363, each year which contains details of the | | | | accounts stating the entitlement to exemptions |
| directors, company secretary, registered office | | | | from detailed accounts and audit and include a |
| and shareholders. The companies house filing fee | | | | statement from the directors that the accounts |
| of thirty pounds which is reduced to fifteen | | | | have been correctly prepared. |
| pounds if the web filing service is used to file the | | | | The balance sheet must be signed and dated by a |
| return online. | | | | director before submission. If the option to file |
| In addition the directors are also responsible for | | | | online has not been taken then the annual |
| submitting to companies house a set of financial | | | | accounts should be posted either to companies |
| accounts each year. Failure to submit a set of | | | | house at Cardiff if the company registered office |
| accounts can result in companies house striking | | | | is situated in England and Wales or to Edinburgh if |
| off the company from the company register and | | | | the registered office is situated in Scotland. |