Dormant companies explained

Companies House treats a company as dormant if it has no significant accounting transactions during the year — essentially no entries in the accounting records beyond a handful of permitted items (the confirmation statement fee, late filing penalties, and payment for the original shares).

HMRC uses a looser, practical meaning: dormant for Corporation Tax means not trading and not receiving income. A company can be dormant for HMRC (not trading) but not for Companies House (it paid bank charges, say). The distinction decides which simplified filings you can actually use.

• Protecting a company name before launching, or defensively around an existing brand
• Pausing a business without losing its history, bank relationships or incorporation date
• Holding an asset such as intellectual property or a future trading vehicle bought off the shelf
• Restarting later — reactivating a dormant company is quicker than incorporating and registering afresh

1. Dormant accounts to Companies House, 9 months after year end (never-traded companies limited by shares can use the simple AA02 form)
2. Confirmation statement at least every 12 months, with the £34 online fee
3. Nothing to HMRC once dormancy has been notified and accepted

The classic failure mode is simply forgetting the company exists: penalties for late dormant accounts are identical to those for trading companies (£150 rising to £1,500), and an unfiled confirmation statement invites strike-off.

We’ll keep your dormant company compliant →

One invoice, one supplier payment, one month of trading income — and the company is active. You must tell HMRC within 3 months of starting business activity, and the next accounts will be normal micro-entity or small company accounts. Going the other way (active to dormant) needs the loose ends tidied first: final bills, VAT deregistration and closing the payroll scheme where relevant.

Accounts for companies starting to trade →