Last updated Dec 13, 2023 and written by Tom Richardson

How Can I Make My Company Dormant?

You’ve found a company name you like and so naturally you want to prevent anyone else from taking it before you’re ready to get your business up and running. This brings us to one of the most common queries we receive on customer service; “How can I make my company dormant?”

First of all, let’s define what a dormant company is. 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”

There is no specific form to be filed to Companies House or HMRC in order to make your company dormant, however straight after forming your company it is worth letting HMRC know that you do not intend to trade with the company right away. To do this, you can write to your local tax office (a quick online search will tell you yours) informing them of your company’s dormant status. HMRC are generally good at knowing whether you are trading or not, however, you should keep them up to date to ensure that you do not receive any unwarranted requests to file Tax Returns. Nothing else will be required from you in the company’s first year.

During the second year, you will be required to fulfil a couple of filing obligations to Companies House in order to maintain your company. The first of these obligations is the Confirmation Statement which is an update of statutory information only. For example, if there are any changes in the shareholding of the company, this is how you inform Companies House of the change. When filing your Confirmation Statement you will be asked to provide a SIC (Standard Industry Classification) code which describes the company’s nature of business. At this point you can provide the code for a non-trading (dormant) company, 99999.

Later in the company’s second year – generally 21 months after incorporation – you will be required to file the company’s first Confirmation Statement to Companies House. If your company is still dormant then you need to file a very basic set of accounts called Dormant Company Accounts. Although it may feel like a bit of a formality, it is highly recommended that you file your company’s accounts on time because Companies House will issue you with a hefty fine if they are filed late.

You will be required to file the Annual Accounts and Confirmation Statement to Companies House each year regardless of if your company is trading or not (the only difference being that you file Dormant Company Accounts if dormant), however HMRC will not require you to pay corporation tax until you start to trade with your company.

Even if your company is dormant, your company’s status on Companies House and also our system will be “active”. This status does not actually describe whether your company is trading or not. For example, if a company has been closed down, the status will be “dissolved” and if it is in the process of closing down, it will be “active – proposal to strike off”, however at no point will it show “dormant” or “non-trading”.

We hope you find this post helpful. If you did, take a look at our blog for more advice on running a limited company.