GLOSSARY

Dormant Company definition

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What does Dormant Company mean?

A company is dormant when it has no significant accounting transaction.

For purposes of determining whether a company is dormant, a 'significant accounting transaction' means a transaction required by Companies Act 2006 (CA 2006), s 386 that must be entered in the company's accounting records. To determine whether the company is dormant, the following must be disregarded:

(1) any transaction from the taking of shares in the company by a subscriber to the memorandum resulting from an undertaking of his with regard to the formation of the company;

(2) any transaction comprising the payment of: (a) a fee to the registrar of companies [for 'registrar of companies' for a change of the company's name; (b) a fee to the registrar for the re-registration of the company; (c) a penalty for failing to file company accounts; or (d) a fee to the registrar for the registration of an annual return.

Any reference in CA 2006 to a body corporate other than a company being dormant has a corresponding meaning. CA 2006, s 1169(4).

Minimise

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Dormant companies—accounts and audit

A dormant company is constituted and managed in the same way as any other company. However, the requirements relating to accounts and audit that generally apply to a company are relaxed in relation to a dormant company.What is a dormant company?A company is dormant during any period in which it has had no significant accounting transaction.A significant accounting transaction is one which the company should enter in its accounting records pursuant to section 386 of the Companies Act 2006 (CA 2006) and does not include:•any transaction arising from the taking of shares in the company by a subscriber to the memorandum of association as a result of an undertaking of his in connection with the formation of the company, or•any transaction consisting of the payment of:◦a fee paid to Companies House on a change of the company's name◦a fee paid to Companies House on the re-registration of a company◦a penalty paid in relation to the late filing of annual accounts under CA 2006, s 453, or◦a fee paid to Companies House for the registration of a confirmation statement (previously annual return)There is a distinction between a company that is dormant and a company that is simply not trading. A dormant company will not be trading. However, a company that is not trading is not necessarily dormant—if

When do the UK transfer pricing rules apply?

When do the UK transfer pricing rules apply? Scope of UK transfer pricing rules The UK transfer pricing rules apply for UK corporation and income tax purposes where: • a provision has been made or imposed between two persons by means of a transaction or series of transactions • the participation condition is satisfied • the actual provision differs from the arm’s length provision, and • there is a potential UK tax advantage These are explained further below. The rules apply to accounting periods ending on or after 1 July 1999 and (for income tax purposes) years of assessment from 1999/2000 onwards. Finance Act 2004 expanded the original legislation to cover transactions between UK companies from 1 April 2004. There are separate rules for oil-related ring-fence trades. Where they apply, the broad effect of the UK transfer pricing rules is to require an adjustment of taxable profits and losses of affected persons by substituting the arm’s length provision in the place of the actual provision. For more details, see Practice Note: What happens when the transfer pricing rules apply? Participation condition The participation condition is satisfied where • at the time of making the provision one of the affected persons was directly or indirectly participating in the management, control or capital of the other, or • the same person(s) was or were directly or indirectly participating in the management, control or capital of the affected persons The time frame within

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Where a company has made an application to strike off a dormant company which has been published in the Gazette, can a director of that company resign from his position as a director without affecting the strike off application?

Where a company has made an application to strike off a dormant company which has been published in the Gazette, can a director of that company resign from his position as a director without affecting the strike off application? This Q&A considers whether a director of a company that has had its application for strike off published in the Gazette can resign as director. The requirement for a minimum number of directors CA 2006, s 154 provides that, at a minimum: • a public company must, at all times, have two directors, and • a private company must, at all times, have one director This means that: • in case of a public company with only two directors, a new director of the company must be appointed before either one of them can leave office, and • in the case of a private company with only one director, a new director of the company must be appointed before that sole director can leave office If a company finds itself with no directors it will be in breach of the CA 2006 and could be directed to appoint directors by the Secretary of State. It is for the shareholders to rectify the situation if a company has no directors. They may appoint a new director in a general meeting of the company. Such a general meeting may be called either pursuant to a provision in

What is the process to change a dormant public company to a private limited company?

What is the process to change a dormant public company to a private limited company? Re-registration of companies Part 7 of the Companies Act 2006 (CA 2006) deals with the re-registration of a company, with CA 2006, ss 97–101 dealing specifically with the re-registration of a public company as a private company. Our Checklist Re-registration of a company: from public to private—checklist provides a guide of the steps to be taken and the documents required for the re-registration process. Our Practice Note: Re-registration of a public company as a private limited company—an introduction and preliminary considerations covers the key issues arising on a re-registration. Procedure for re-registration The procedure which the public company will need to follow is specified in our Practice Note: Re-registration of a public

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Local Government weekly highlights—28 April 2022

This week's edition of Local Government weekly highlights includes updates on the Ukraine conflict such as the EHRC’s correspondence with British local authorities about their obligations under the Equality Act, the Cabinet Office’s announcement on the Public Bodies Review programme and the publication of new guidance relating to the Attorney General’s Powers. News analysis includes commentary on Ukrainians’ options with claiming asylum in the UK, the Cabinet Office‘s publication of the Model Services Contract 2.0, NHS England’s publication of the guidance: ‘Working together at scale: guidance on provider collaboratives’, The proposed new draft texts for the EU Research & Development block exemption and the R&D section in the EU Horizontal Guidelines and the July 2022 deadline for all acute and mental health services to be required to become part of a provider collaborative. Case analysis includes examinations of Coughlan v Minister for the Cabinet Office, where the Supreme Court made a landmark ruling on voter ID; LB v Surrey County Council, in which the High Court rejected a local authority’s claim that providing SEND support was too onerous to achieve in this case; and Jones v SSHC, where the High Court clarified the meaning of 'Classified Road' for purposes of Article 2 of GPDO. The weekly highlights also includes further updates on public procurement, governance, education, healthcare, social housing, planning, licensing, environmental law and climate change and highways.

Court of Appeal—relevance of defendant’s own funding in security for costs applications (Heathfield International LLC v Axiom Stone (London) Ltd)

Dispute Resolution analysis: The Court of Appeal upheld the first instance decision that had considered the funding position of the defendant to be a relevant factor when determining whether to make an order for security for costs. However, the Court of Appeal clearly stated that this did not gave rise to a general proposition that a security for costs application could be refused solely on the grounds that a defendant could not afford to fund their own defence. Written by Claire Kretzmann, costs lawyer at Paragon Costs Solutions.

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View the latest UK Parliament Acts documents on Dormant Company

1169 Dormant companies

(1) For the purposes of the Companies Acts a company is “dormant” during any period in which it has no significant accounting transaction.(2) A “significant accounting transaction” means a transaction that is required by section 386 to be entered in the company's accounting records.(3) In determining whether or when a company is dormant, there shall be disregarded—(a) any transaction arising from the taking of shares in the company by a subscriber to the memorandum as a result of an undertaking of his in connection with the formation of the company;(b) any transaction consisting of the

Dormant Company is referenced 1 in UK Parliament Acts

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25. Meaning of 'dormant company'.

25. Meaning of 'dormant company'. For the purposes of the Companies Acts1, a company2 is 'dormant' during any period in which it has no significant accounting transaction3.In determining whether or when a company is dormant, there must be disregarded4: (1) any transaction arising from the taking of shares5 in the company by a subscriber to the memorandum6 as a result of an undertaking of his in connection with the formation of the company7; (2) any transaction consisting of the payment of: (a) a fee

Dormant Company is referenced 1 in Halsbury's Laws of England

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