Dormant companies

Your company is called ‘dormant’ by Companies House if it’s had no ‘significant’ transactions in the financial year that you’d normally report. Significant transactions do not include:

• filing fees paid to Companies House
• penalties for late filing of accounts
• money paid for shares when the company was incorporated

Dormant company accounts submitted to Companies House need not include a profit and loss account or directors’ report. Unaudited dormant accounts are much simpler than those of a trading company but must contain:

• a balance sheet containing statements above the director’s signature and their printed name to the effect that the company was dormant throughout the accounting period
• any previous year’s figures for comparison – even though there are no items of income or expenditure for the current year;
• certain notes to the balance sheet

A company that’s a ‘dormant’ has a significantly reduced statutory burden on it, only having to submit an unaudited, abridged balance sheet and certain notes to Companies House, plus file an annual confirmation statement – what used to be known as an annual return. It won’t have to file a profit and loss account or directors’ report.

Companies House’s WebFiling offers a simple web form enabling easy and quick electronic submission of dormant accounts for companies that have never traded. This is now available for both companies limited by shares and companies limited by guarantee.

Form AA02 which is for dormant companies that have not traded since incorporation.

The AA02 form is not suitable for every dormant company, for example dormant subsidiary companies cannot file a form AA02 as the form cannot accommodate the specific details required to be submitted by dormant subsidiary companies.

Your subsidiary may not have to file annual accounts at Companies House if:

• it’s dormant throughout the financial year
• its accounts period ends on or after 1 October 2012
• its parent company is established under the law of an EEA state

You may be able to claim exemption from:

• preparing accounts under section 394A of the Companies Act 2006
• filing accounts at Companies House under section 448A

A dormant subsidiary cannot claim exemption if at any time in the financial year it was a:

• quoted company
• authorised insurance company
• banking company
• e-Money issuer
• MiFID investment firm
• UCITS management company
• company that carries on insurance market activity
• special register body as defined in section 117(1) of the Trade Union and Labour Relations (Consolidation) Act 1992
• employers’ association as defined in section 122 of the Trade Union and Labour Relations (Consolidation) Act 1992 or Article 4 of the Industrial Relations (Northern Ireland) Order 1992