{"id":174030,"date":"2022-08-09T04:40:32","date_gmt":"2022-08-09T03:40:32","guid":{"rendered":"https:\/\/legalvision.co.uk\/?p=174030"},"modified":"2025-06-26T03:20:13","modified_gmt":"2025-06-26T02:20:13","slug":"dormant-company","status":"publish","type":"post","link":"https:\/\/legalvision.co.uk\/corporations\/dormant-company\/","title":{"rendered":"How Do I Make a Company Dormant in England?"},"content":{"rendered":"\n<p>If you have a private company limited by shares in England or Wales that is not actively trading, the company may qualify for dormancy status. This article will explain the conditions your company must meet to be eligible for dormancy status. It will then look at the practical effects of dormancy, including your <a href=\"https:\/\/legalvision.co.uk\/commercial-contracts\/fulfil-obligations\/\">notification obligations<\/a>.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">What is a Dormant Company?<\/h2>\n\n\n\n<p>A company may be considered dormant if it is not doing business (i.e any trading activities and has no other income. Dormant status has different implications for <a href=\"https:\/\/legalvision.co.uk\/corporations\/corporation-tax-assessment\/\">Corporation Tax<\/a> and Company Tax Returns, as well as for annual accounts and returns filed with Companies House.&nbsp;<\/p>\n\n\n\n    <div class=\"my-7 lg:my-10 border-y-2 border-gray-100 py-7 lg:py-10 flex flex-col sm:flex-row items-start gap-10\">\n                    <img decoding=\"async\" class=\"w-52 mx-auto my-0! rounded\" src=\"https:\/\/img.legalvision.com.au\/wp-content\/uploads\/sites\/4\/2023\/05\/19032432\/Screen-Shot-2023-05-19-at-12.24.24-pm.png\" alt=\"Front page of publication\"\n                 loading=\"lazy\" width=\"208\" height=\"298\">\n                <section>\n            <div class=\"text-2xl font-bold\">Company Registers<\/div>\n            <div class=\"body-text\">\n                <p>When you incorporate a company in England and Wales, you must maintain a number of company registers at its registered office or at the Companies House. This template includes these company registers.<\/p>\n            <\/div>\n            \n\n<a href=\"https:\/\/legalvision.co.uk\/documents\/company-registers\/\" class=\" block px-5 py-3.5 max-w-fit bg-orange button__hover transition rounded text-white font-bold text-lg no-underline uppercase leading-tight text-center\" target=\"\" rel=\"\">Download Now<\/a>        <\/section>\n    <\/div>\n\n\n\n\n<h2 class=\"wp-block-heading\">Dormant for Corporation Tax and Company Tax Returns<\/h2>\n\n\n\n<p>Your company is usually dormant for Corporation Tax if it:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>has stopped trading and has no other income, for example, investments;<\/li>\n\n\n\n<li>is a <a href=\"https:\/\/www.gov.uk\/first-company-accounts-and-return\/trading-after-set-up\">new limited company that hasn\u2019t started trading<\/a>;&nbsp;<\/li>\n\n\n\n<li>is an <a href=\"https:\/\/www.gov.uk\/corporation-tax-trading-and-non-trading#when-hmrc-will-treat-clubs-and-unincorporated-organisations-as-dormant\">unincorporated association or club owing less than \u00a3100 Corporation Tax<\/a>; and<\/li>\n\n\n\n<li>is a <a href=\"https:\/\/www.gov.uk\/set-up-property-management-company\">flat management company<\/a>.<\/li>\n<\/ul>\n\n\n\n\n<a href=\"#content-next\"\n   class=\"block p-4 mt-10 text-xl font-bold text-center text-white no-underline bg-gray-800 rounded-t-xl\">\n    Continue reading this article below the form\n    <i class=\"text-xl fa-regular fa-arrow-down\"><\/i>\n<\/a>\n<div class=\"px-6 pt-10 pb-12 mb-10 text-center bg-gray-100 rounded-b-xl sm:px-12 test\">\n    <div class=\"mb-8 text-2xl font-bold text-orange\">\n        Need legal advice?\n        <br>\n        <span class=\"text-lg not-prose\">\n                            Call <a href=\"tel:+448081968584\" class=\"not-prose\">0808 196 8584<\/a> for urgent assistance.\n                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Significant transactions do not include:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>filing fees paid to Companies House;<\/li>\n\n\n\n<li>penalties for late filing of accounts; and<\/li>\n\n\n\n<li>money paid for shares when the company was incorporated.<\/li>\n<\/ul>\n\n\n\n<div  class=\"box box--icon box--warning\">\n    <p>If money is exchanged between your company and anyone else outside these three exceptions, your company might lose its dormancy status with Companies House or become ineligible for dormancy.<\/p>\n<\/div>\n\n\n\n<p>In some cases, the law may permit a company to enter into <a href=\"https:\/\/legalvision.co.uk\/commercial-contracts\/four-elements-commercial-contract\/\">contracts<\/a> without affecting its dormancy status or its ability to acquire dormancy. However, if the contract involves the company in any transaction, this will be regarded as a significant transaction.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Practical Effect of Dormancy&nbsp;<\/h2>\n\n\n\n<p>Dormant companies are treated differently by HMRC compared to non-dormant trading companies. The main distinctions in treatment relate to corporation tax and company accounts filing obligations.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Corporation Tax&nbsp;<\/h3>\n\n\n\n<p>All limited companies are required to pay corporation tax. There are two circumstances where the law considers your company dormant for corporation tax purposes. Either where:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>you have incorporated your company, but it has not yet started trading; or&nbsp;<\/li>\n\n\n\n<li>it used to trade but now no longer does.&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>In both cases, trading here simply means engaging in any commercial activity or enterprise where you sell goods or services for money. <\/p>\n\n\n\n<div  class=\"box box--icon box--info\">\n    <p>It does not include pre-trading activities, where you incur costs to establish your business but haven&#8217;t yet charged anyone.<\/p>\n<\/div>\n\n\n\n<h3 class=\"wp-block-heading\">Accounts<\/h3>\n\n\n\n<p>Provided your company qualifies for dormancy status, it may not have to file audited or unaudited accounts. Instead, it can file dormant accounts.&nbsp;<\/p>\n\n\n\n<p>Not all companies are required to have an audit. A company may qualify for an audit exemption for the financial years between 1 January 2016 and 5 April 2025 if it has at least two of the following:&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>an annual turnover of no more than \u00a310.2 million;<\/li>\n\n\n\n<li>assets worth no more than \u00a35.1 million; and<\/li>\n\n\n\n<li>50 or fewer employees on average.<\/li>\n<\/ul>\n\n\n\n<p>A company may qualify for an audit exemption for the financial years that begin on or after 6 April 2025 if it has at least two of the following:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>an annual turnover of no more than \u00a315 million;<\/li>\n\n\n\n<li>assets worth no more than \u00a37.5 million; and<\/li>\n\n\n\n<li>50 or fewer employees on average.<\/li>\n<\/ul>\n\n\n\n<p>Moreover, a company may also be eligible to claim an exemption from audit in accordance with section 480 of the <em>Companies Act<\/em>. If a Company has been dormant since its incorporation, then this is one exemption. If the Company has been dormant since the end of the previous financial year, it must meet further conditions. These conditions include:\u00a0<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>it is entitled to prepare accounts in accordance with the small companies regime;<\/li>\n\n\n\n<li>it does not have to prepare group company accounts;<\/li>\n\n\n\n<li>it is not involved in any regulated financial activities;&nbsp;<\/li>\n\n\n\n<li>none of the company\u2019s shareholders with 10% or more shares in aggregate have demanded an audit; and&nbsp;<\/li>\n\n\n\n<li>your accounts include the same particulars as required for companies dormant since incorporation.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Registering Your Company for Dormant Status<\/h2>\n\n\n\n<p>If your company is dormant for accounts purposes, it will usually be dormant for tax purposes. Where this is the case, you will need to <a href=\"https:\/\/www.gov.uk\/dormant-company\/dormant-for-corporation-tax\">alert Companies House<\/a> through their e-filing system.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Key Takeaways&nbsp;<\/h2>\n\n\n\n<p>Dormancy refers to a company that is not trading. A dormant company can be incorporated as such, or it may be a company that was previously active in trade but is no longer. A company may be dormant for tax purposes (HMRC) or annual accounts and returns purposes (Companies House). In most cases, a company that is dormant for one purpose will also be dormant for another.<\/p>\n\n\n\n<p>Dormancy for tax purposes generally exempts the company from corporation tax liability to HMRC, which makes sense given that there is typically no trading activity and therefore no taxable profit. Where a company is dormant for accounting purposes and would usually be required to file audited accounts, it may be exempt from this requirement and can instead file simplified dormant accounts consisting of a balance sheet and statements confirming its dormant status.<\/p>\n\n\n\n<p>If you need help with your business, our experienced<a href=\"https:\/\/legalvision.co.uk\/corporate-lawyers-lp\/\"> corporate lawyers<\/a> can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us on <a href=\"tel:+448081968584\" class=\"AVANSERnumber dynamic-number\">0808 196 8584<\/a> or visit our <a href=\"https:\/\/legalvision.co.uk\/membership\">membership page<\/a>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Frequently Asked Questions<\/h2>\n\n\n\n<p><strong>When is a company dormant?<\/strong><\/p>\n\n\n\n<p>A company is dormant when it is not engaged in any trading.<\/p>\n\n\n\n<p><strong>What effect does dormancy have on my company?<\/strong><\/p>\n\n\n\n<p>A company may be dormant for tax purposes (HMRC) or accounting purposes (Companies House). In most cases, a company that is dormant for one purpose will also be dormant for another. Dormancy for tax purposes generally exempts the company from corporation tax liability to HMRC, which makes sense given that there is typically no trading activity and therefore no taxable profit. Where a company is dormant for accounting purposes and would usually be required to file audited accounts, it may be exempt from this requirement and can instead file simplified dormant accounts consisting of a balance sheet and statements confirming its dormant status<\/p>\n<div class=\"not-prose m-feedback-prompt\">\n    <!-- Thumbs up\/down bar -->\n    <div class=\"m-feedback-prompt__main\">\n        <div class=\"m-feedback-prompt__title\">Was this article helpful?<\/div>\n        <div>\n            <!--span class=\"m-feedback-prompt__button--text\">Thanks!<\/span-->\n            <button type=\"button\" class=\"m-feedback-prompt__button m-feedback-prompt__button--yes\"\n                    data-analytics-link=\"feedback-prompt:yes\" aria-label=\"Agree\">\n                <i class=\"fa-regular fa-thumbs-up fa-3x\"><\/i>\n            <\/button>\n            <button type=\"button\" class=\"m-feedback-prompt__button m-feedback-prompt__button--no\"\n                    data-analytics-link=\"feedback-prompt:no\" aria-label=\"Disagree\">\n                <i class=\"fa-regular fa-thumbs-down fa-3x\"><\/i>\n            <\/button>\n        <\/div>\n    <\/div>\n\n    <!-- Feedback form -->\n    <div class=\"m-feedback-prompt__form\">\n        <div class=\"m-feedback-prompt__form--thanks \">\n            <div>Thanks!<\/div>\n            <p>\n                We appreciate your feedback \u2013 your submission has been successfully received.            <\/p>\n        <\/div>\n        <form id=\"contact-form\" class=\"m-feedback-prompt__form--form\" action=\"\" method=\"post\">\n            <input type=\"hidden\" id=\"authenticity_token\" name=\"authenticity_token\" value=\"9eb4f72322\" \/><input type=\"hidden\" name=\"_wp_http_referer\" value=\"\/api\/wp\/v2\/posts\/174030\" \/>            <input value=\"https:\/\/legalvision.co.uk\/corporations\/dormant-company\/\" type=\"hidden\" name=\"currenturl\"\n                   id=\"currenturl\">\n            <input value=\"How Do I Make a Company Dormant in England?\" type=\"hidden\" name=\"currenttitle\"\n                   id=\"currenttitle\">\n            <label>\n                <!-- display on thumbs-up -->\n                <span class=\"m-feedback-prompt__feedback m-feedback-prompt__feedback--yes\">\n                    Can you tell us <span class=\"font-semibold\">why<\/span> you found it helpful?\n                <\/span>\n\n                <!-- display on thumbs-down -->\n                <span class=\"m-feedback-prompt__feedback m-feedback-prompt__feedback--no text-lg\">\n                    How can we better improve this article?\n                <\/span>\n                <textarea name=\"feedbackmessage\" id=\"feedbackmessage\" required><\/textarea>\n            <\/label>\n\n            <div class=\"m-feedback-prompt__form--error\" id=\"form-submit-error\"><\/div>\n            <button id=\"submit-contact-form-button\" type=\"submit\" name=\"commit\" class=\"m-feedback-prompt__form--submit\"\n                    data-analytics-link=\"feedback-prompt:submit\">\n                Submit            <\/button>\n        <\/form>\n    <\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>If you have a private company limited by shares in England or Wales that is not actively trading, the company may qualify for dormancy status. This article will explain the conditions your company must meet to be eligible for dormancy status. It will then look at the practical effects of dormancy, including your notification obligations.&nbsp;<a href=\"https:\/\/legalvision.co.uk\/corporations\/dormant-company\/\">Continue reading <span class=\"sr-only\">&#8220;How Do I Make a Company Dormant in England?&#8221;<\/span><\/a><\/p>\n","protected":false},"author":13461,"featured_media":191808,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_relevanssi_hide_post":"","_relevanssi_hide_content":"","_relevanssi_pin_for_all":"","_relevanssi_pin_keywords":"","_relevanssi_unpin_keywords":"","_relevanssi_related_keywords":"","_relevanssi_related_include_ids":"","_relevanssi_related_exclude_ids":"","_relevanssi_related_no_append":"","_relevanssi_related_not_related":"","_relevanssi_related_posts":"3331,4389,173778,1181,4275,2256","_relevanssi_noindex_reason":"","editor_notices":[],"footnotes":""},"categories":[28],"tags":[137,223,338,617,942,943],"class_list":["post-174030","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-corporations","tag-companies-house","tag-large-business","tag-hmrc","tag-incorporation","tag-dormant-company","tag-dormant-status"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.1.1 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>How Do I Make a Company Dormant in England? | LegalVision UK<\/title>\n<meta name=\"description\" content=\"A company may be dormant for tax purposes or accounting purposes. 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