How to set up a dormant limited company

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We are a team of writers, experimenters and researchers providing you with the best advice with zero bias or partiality. This article was authored by:
  • Mathew Aitken

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):

  •    Name
  •    DOB
  •    Nationality
  •    Current occupation
  •    Service office address
  •    Home address
  •    Town of birth
  •    Eye colour
  •    Contact number

The following information for each Shareholder:

  •    Name
  •    Number of shares held
  •    Value of shares

Details of the person/s with significant control:

  •    Name
  •    DOB
  •    Nationality
  •    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:

Don’t trade

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.

Inform HMRC

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.

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.

Mathew Aitken

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