How to set up a dormant limited company

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A company is considered dormant if it is not trading. You may want to form a dormant limited company for a number of reasons, with the two main being:

  • You’re considering starting a business in the future and want to stop anyone else from taking your future company name
  • You’re trading as a sole trader or partnership and want to stop anyone else from taking your company name

So there are a few reasons why you may want to start a dormant limited company, but how do you actually form one? Let’s take a look.

The set-up process for a dormant company is exactly the same as it is for a trading company; it’s what you do after the company formation process that differs slightly. Firstly, to form the company you will need:

  • A unique company name – check here to see if your ideal company name is available (opens in a new tab)
  • A registered office address
  • Director information: name, date of birth, nationality, occupation, service address (official address), residential address, eye colour, town birth, phone number
  • Shareholder information: name, number of shares held, value of shares
  • Person with significant control information: name, date of birth, nationality, occupation, service address (official address) and residential address, plus any three from the following seven security details to act as an online signature: first three letters of town of birth, first three letters of mother’s maiden name, first three letters of eye colour, last three digits of phone number, last three digits of father’s forename, last three characters of National Insurance number or last three characters of passport number.

Once the company has been formed, to ensure dormant status you need to:

Stay dormant

According to Companies House: “A company is dormant if it has had no ‘significant accounting transactions’ during the accounting period. A significant accounting transaction is one which the company should enter in its accounting records.”

Keep HMRC updated

Deal accordingly with any HM Revenue & Customs (HMRC) correspondence, informing them of your company’s dormant status.

File a confirmation statement annually

The confirmation statement is an annual filing requirement for all limited companies, regardless of if they’re trading or not. Basically put, it involves you confirming that all the information Companies House hold for your company is correct, and if it isn’t – updating the information. A company must file a confirmation statement at least once a year.

File dormant company accounts annually

All companies must deliver a set of company accounts to Companies House / HMRC. Dormant companies can deliver a special set of accounts called ‘dormant company accounts’. A company’s first set of accounts should be delivered no later than 21 months after incorporation.

There you have it… how to form a dormant limited company. If and when you do decide to start trading, just remember to notify HMRC of this change in status.

Ready to start your business adventure with a dormant company? Company Formation MadeSimple have registered over 500,000 UK limited companies and offer a number of low cost online formation services for first-time formers and serial entrepreneurs alike. Find out more now: Company Formation MadeSimple

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