Why would a company be dormant?


One of my mates has set up a dormant company, and I was just curious how that would benefit a company? What are the benefits of setting up a dormant company? Thanks for your help.



Companies can be dormant (inactive) for lots of reasons, such as:

  • To protect a company name
  • To reserve a company name for later use
  • Death or long-term illness of the owner
  • Restructuring of the business
  • Owner is taking a break for personal reasons - pregnancy, travel, study, employment
  • For the purpose of being a second member of a limited liability partnership

A company can remain dormant for any length of time, as long as it does not receive any income or have any transactions in its bank account other than payments from the subscribers for their shares, Companies House filing fees and late filing penalties imposed by HMRC.

2 years ago

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