Dormant company accounts are simplified accounts prepared by companies that are inactive (not trading) and/or companies that have not spent or received any money during their most recent accounting period.
Rather than having to file more comprehensive annual accounts at Companies House and deliver full statutory accounts and a tax return to HMRC, dormant companies need only prepare an abridged (abbreviated) set of accounts for Companies House.
How to prepare and file dormant company accounts
Preparing dormant company accounts is pretty straightforward because the very nature of a dormant company means there aren’t any ‘significant accounting transactions’ to report. There are substantial savings in time and money to be gained by filing dormant accounts as they do not require an accountant to prepare them.
You can submit dormant company accounts online using form AA02. To complete this form, you must provide the following information:
- Company name and registration number
- Balance sheet date
- Details of issued share capital (number and class of shares, nominal value, and total equity of shareholders)
- Net assets – called-up share capital not paid + cash at bank and in hand
- The date on which the accounts were approved by the director(s)
- Name and signature of one of the directors
Once filed at Companies House, your accounts will be made publicly available online on the official companies register.
You may have to prepare full accounts for members if they ask you to do this, but you won’t have to file any accounts or Company Tax Returns with HMRC for as long as your company remains dormant.
When do I need to file my dormant company accounts?
You will need to file dormant company accounts once every year, for as long as your company remains dormant.
The deadline for sending accounts to Companies House is normally 9 months after your accounting reference date (ARD). Your ARD marks the end of your company’s financial year.
However, if you are filing your first accounts since forming your limited company, the filing deadline will be 21 months after the date of company formation.
Is my company dormant?
If you have a limited company that is not trading (i.e. it is not doing business), is not receiving any other type of income (e.g. from investments), and is not spending any money, it is most likely a dormant company.
Typically, limited companies are dormant because:
- They’ve been set up for the sole purpose of protecting a company name or holding an asset, such as land, real estate, or intellectual property
- A new business is not yet ready to start trading – the business owners are still in the early stages of the set-up process, preparing to trade at some point in the future
- A company that was previously trading is taking a break to restructure or pause operations for some other reason
- A sole trader is planning to convert their business into a limited company structure, but they’re not ready to move the business over yet
- A company has ceased trading and will eventually be formally closed and struck off the Companies House register
Some transactions (i.e. income and expenditure) can be made without forfeiting your company’s dormant status. These are:
- Money that subscribers (the founding shareholders) pay for their shares
- Fees paid to Companies House for filing a confirmation statement, changing the name of the company, or re-registration of the company
- Late filing penalties paid to Companies House
If your company spends or receives money for anything other than these excepted transactions, it will not be classed as dormant.