Last updated Jun 12, 2024 and written by Admin

Forming A Dormant Company – Don’t Be Fooled

Last Updated: 26/08/2014

Let’s keep this one brief. Forming a dormant company is exactly the same as forming a trading company. You still need a company name, you still need a company director and you still need a shareholder. The formation process is not one iota different.

What’s important with a dormant company (other than to not start trading!) is that you file the correct documentation post formation. A few weeks after the incorporation of the company HMRC will send a letter , the “CT41G”. Simply write to HMRC at the address provided at the top of the letter – telling them that your company is unlikely to start any business activity in the near future. When the company starts trading, you must then notify HMRC within three months of starting your first accounting period. It is possible HMRC will also mail a letter in regards to Corporation Tax. This can be countered with a short letter explaining that the company is dormant.

The next maintenance step for your dormant company is to prepare the Annual Return (due once a year). The Annual Return is a snapshot of the appointments in the company and does not really deal with the trading status of the company. The only part of the Return that touches on this is the “UK Standard Industrial Classification Code”, more commonly known as the “Sic Code”. All you need to remember is that the Sic Code for a dormant company is 99999.

The final step is preparing the Dormant Company Accounts. As the name suggests, Accounts deal with the finances of your company. The first set of Accounts are due 21 months after incorporation (this is the deadline, it is recommended to prepare these before this date), they are then due yearly after this. It’s very important to make a note of your due dates as a fine is imposed for late filing. If your company were trading you would need to submit the standard Accounts, because it is Dormant you simply submit Dormant Company Accounts.

As long as these steps are adhered to you’ll have no problem in maintaining you dormant company.

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