Can a dormant company be a guarantor of another limited company?

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Hey

Could somebody on here please tell me whether a company registered as dormant can serve as a guarantor for another company? I’m just trying to figure out whether this is allowed or not. Help, please.

Cheers

Answers

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Yes, a dormant company can be the guarantor of another limited company but it will only remain dormant as long as it doesn't have any money going into or out of its business bank account.

If you need to pay the guarantee to the other company, the dormant company will become active because the transaction will have to be entered into its accounts.

Any other incidental payments you may have - company formation costs, accountancy fees, etc - should be paid from a bank account that is not in the dormant company’s name. This will enable you to retain the dormant trading status.

a year ago
 

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