Dormant Company Accounts

Dormant Company Accounts

All limited companies by law have to keep accounting records, whether they are trading or not. So even if the company is not carrying out business, dormant accounts must be filed. The same deadlines and time limits apply for dormant accounts as they do for other annual accounts. If they are late being filed into Companies House, then penalties can be incurred.

Dormant company accounts can only be filed by a company limited by shares which is not a subsidiary and where the only transaction is the issue of subscriber shares. A company can only be called dormant if it has not had any significant accounting transactions during the last financial year. They are able to claim exemptions from audit and only have to prepare and deliver to Companies House an abbreviated balance sheet. Financial transactions that do not affect the submitting of dormant company accounts are:

• payment for shares taken by subscribers to the memorandum of association
• fees paid for a change of company name, the re-registration of a company and filing of annual returns
• payment made because of penalties incurred due to late filing.

Dormant company accounts do not have to include a profit and loss account and can be very brief, particularly if the company has been dormant since incorporation. If the company has not traded since incorporation, then form DCA can be used to submit the dormant company accounts.

View form DCA here.

This form can’t be used if the companies became dormant after trading for a while, and whilst it is a standard form, it does not have to be used for companies that have never traded.

The company directors are responsible for preparing and filing accounts to Companies House, and they are liable for prosecution if they fail to do so.

If a company begins to trade again, the company can no longer claim for exemptions from audit. They are required to provide full accounts, not just dormant company accounts.