• A Dormant Company Defined Jan 13, 2021 at 3:56 PM
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    There’s no replacement for answering the question, “What is a dormant company?” than a clear and concise definition. Companies are dormant if they are inactive and not trading (or receiving any type of income from trading). However, the company has to be registered with Companies House and may be dormant from its incorporation date or its trading date.

    What Is a Dormant Company in Relation to Trading?

    The question, “What is a dormant company?” cannot be considered without fully understanding its relative dichotomy — trading. Generally, dormant companies cannot trade or receive income that includes:

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    What Is a Dormant Company in Relation to Corporation Tax?

    If your company has stopped trading and has no income from e.g. investments, then it will be dormant for Corporation Tax, and if the following applies:

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    What Is a Dormant Company in Relation to Companies House?

    As mentioned, your company will be considered dormant there’s been no significant accounting transactions during the financial year, and it is registered with Companies House.

    The transactions have to be limited to:

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    What Is a Dormant Company in Relation to Small Companies and Micro-entities?

    “What is a dormant company?” may be asked with some scrutiny by small companies or micro-entities who would expect different implications of being dormant compared to larger organisations. If your company is dormant and qualifies as “small”, you can file “dormant accounts” instead without the need to include an auditor’s report with your accounts.

    According to the GOV.UK website, your company is considered “small” if it meets any of the following points:

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    What Is a Dormant Company in Relation to Banking Requirements?

    Although a separate bank account is needed for an active company, it’s unwise to have a business bank account for your dormant company as it may indefinitely remain dormant and is not permitted to receive or spend any money. If your company spends or receives money, its dormant status will...


    Read the full article for FREE at https://www.yourcompanyformations.co.uk/blog/a-dormant-company-defined/
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