How to set up a dormant limited company
Learn how to safeguard your ideal company name - now!
Setting up a dormant company is beneficial for a couple of reasons and the great thing is, it’s not very difficult to do. Before we dive into it, you may need to know that for any company to be considered dormant, it shouldn’t be trading.
Why register a dormant company?
You’re probably considering this option because you have an innovative business concept in mind, but want to stop anyone else from using your intended company name or you’re currently operating as a sole trader/partnership and want to make sure your company name is safely yours.
Now that we’ve covered a couple of reasons why let’s look into how you can go about setting one up. The great thing is, setting up a dormant company is the same as setting up a normal trading company, the only difference is the process after formation.
What you’ll need to form your company:
- Your unique company name.
- Your registered office address
The following information for each Director (requires a minimum of 1 director):
- Current occupation
- Service office address
- Home address
- Town of birth
- Eye colour
- Contact number
The following information for each Shareholder:
- Number of shares held
- Value of shares
Details of the person/s with significant control:
- Current Occupation
- Service office Address
- Home Address
After your company has been formed, you will need to do a few things to remain dormant. What to do:
Register your company with a formations agent
As outlined by Companies House, to remain dormant, you cannot have any ‘significant accounting transactions’ during your company’s accounting period. This is because any significant accounting transaction should be recorded in your company accounts, which means you are trading.
You will need to correspond with HMRC (HM Revenue & Customs) up to date and inform them that your company is dormant.
Your confirmation statement
Although you are not trading, you will still be required to file your company’s annual confirmation statement (read more here about what is a confirmation statement).
This is simply to keep Companies House up to date with any changes or to log that all remains the same. You can file your confirmation statement at the end of every period or as and when there are any changes within your company.
File your dormant accounts annually
Although your company is dormant, by law all companies must file their accounts. You will need to the ‘dormant company accounts’. This should be filed no later than 21 months after forming your company.
That’s all you will need to form a dormant company, but when you are ready to start trading, simply inform HMRC of your status and off you go.
Ready to form your company? Smarta Formations provides a simple and affordable process, click here to find out more and get started (external site, link opens in a new tab).