How do I know if my company is a non-trading company?

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This might sound like a very stupid question, but what sort of traits distinguish a trading company from a non-trading company? There’s not a lot going on with my business at the moment, and I’m just needing to know whether my company is still actually trading in legal terms. Please advise.

Answers

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A company is non-trading if it does not engage in business activities but does have certain financial transactions going through its books, like bank costs, rent, wages, utility bills, etc - it may not be liable for tax but it does have to record these costs and file annual accounts at Companies House.

A company is trading (active) if it is engaged in normal trading activities, like manufacturing and selling goods, earning income from other sources, promoting and advertising itself, etc. This type of company is active for Corporation Tax and must file statutory accounts and tax returns.

Non-trading companies can also be dormant. A dormant company does not have any accounting transactions other than payments for shares from its subscribers (first shareholders), Companies House statutory filing fees, and penalties for the late submission of accounts. This type of company need only submit dormant accounts at Companies House.

a year ago
 

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