My company is not trading. Does that mean it's dormant?


Hi guys - I’m wondering something about dormant companies. Mine isn’t trading at the moment, but I never officially registered it as a dormant company. But if I’m not trading, does that make the company dormant? Or is there a difference? Thank you



It depends. A company is only considered ‘dormant’ in the eyes of the law when it is not engaged in any kind of business activity whatsoever - no money being spent; no money being received; no significant accounting transactions during an accounting period.

The only acceptable transactions for a dormant company are:

  • receiving payments for shares from the first shareholders
  • paying filing fees to Companies House
  • paying late filing penalties to HMRC

A non-trading company it is one that is not fully operational - it is essentially dormant on the trading side of things but it has certain transactions that need to be entered into its account. For example - buying stock and equipment, paying rent on a warehouse or office, training staff, advertising and paying manufacturers and suppliers.

As long as there is absolutely no money going in or out of your business bank account (if you have one), your company should be dormant - even a bank service charge or fee can jeopardise a company’s dormant status, so do be careful.

2 years ago

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