Whether you’re safeguarding your business name, holding a valuable asset, or simply taking a break from trading, a dormant company can provide the flexibility you need to figure out where your future ventures are heading. But how do you register a dormant company with HMRC? In the following blog post, we’re going to guide you through the process of registering a dormant company with Companies House, and answer some frequently asked questions on the topic. Let’s get started!

What is a dormant company?

A dormant company is a legally registered business entity that is not actively trading or carrying out any business activities. Essentially, it’s a company that exists on paper but has no ongoing financial transactions. Dormant companies still need to comply with certain legal and regulatory requirements, such as filing annual accounts and confirmation statements with Companies House. However, these requirements are typically less stringent than those for active companies.

Why register a dormant company?

There are several reasons why you might choose to register a dormant company in the UK:

Protecting your business name

Registering a dormant company allows you to reserve a company name, preventing others from using it while you plan your business or develop your ideas.

Holding assets

A dormant company can be used to hold assets such as property, intellectual property, or shares in other companies.

Pausing trading

If you need to take a break from trading for personal or professional reasons, registering your company as dormant can help you maintain its legal status without the need for ongoing financial transactions.

Steps to register a dormant company in the UK

Choose your company name

The first step in registering a dormant company is to choose a unique company name that is not already in use by another registered company. You can use the Companies House name availability checker to ensure your desired name is available.

Decide on a company structure

You’ll need to decide on the structure of your dormant company, such as whether it will be a private limited company, a public limited company, or a limited liability partnership. Each structure has different legal and financial obligations, so choose the one that best suits your needs.

Appoint company officers

Every company in the UK must have at least one director and, in the case of a private limited company, at least one shareholder. Company officers must be at least 16 years old and not be disqualified from acting as a company director. You’ll also need to provide the personal details of your company officers, such as their full name, date of birth, and address. If you don’t yet have an official address for your business, you can use a virtual address London rather than listing your home address – this is preferred when it comes to maintaining your privacy.

Register with Companies House

To register your dormant company, you’ll need to complete an application with Companies House. You can do this online, by post, or through a third-party formation agent. You’ll need to provide the following information:

• Your company’s name and structure
• The address of your company’s registered office (as mentioned above, you can use a virtual address for this)
• Details of your company’s officers
• A statement of capital and initial shareholdings
• A memorandum and articles of association, which set out your company’s rules and regulations

Pay the registration fee

There is a fee for registering your dormant company with Companies House. Note that these fees vary depending on the method of registration: £12 for online applications, £40 for postal applications, and fees vary for third-parties.

File a form AA02

Once your company is registered, you’ll need to file a form AA02 with Companies House to declare it as dormant. This form needs to be filed within three months of your company’s registration date.

FAQs

How long does it take to register a dormant company in the UK?

The time it takes to register a dormant company varies depending on the method of registration. Online applications are usually processed within 24 hours, while postal applications can take up to 10 days.

Can a dormant company become active?

Yes, a dormant company can become active by simply starting to trade or carry out business activities. However, you’ll need to notify Companies House that your company is no longer dormant. You can do this by filing a form AA01, which replaces the form AA02 you filed when your company became dormant. You’ll also need to comply with the legal and financial obligations for active companies, such as submitting full annual accounts and paying corporation tax.

How does a dormant company differ from an active company?

A dormant company does not engage in any business activities or have significant financial transactions, while an active company conducts regular business operations and has ongoing financial transactions. It’s also important to note that dormant companies are not subject to the same taxes and administrative duties, but only if they ensure to register their business as dormant.