Dormant companies—accounts and audit

Copyright © 2025 LexisNexis
Published by a LexisNexis Corporate expert
Practice notes

Dormant companies—accounts and audit

Copyright © 2025 LexisNexis

Published by a LexisNexis Corporate expert

Practice notes
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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:

  1. •

    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

  2. •

    any transaction consisting of the payment of:

    1. ◦

      a fee paid to Companies House on a change of the company's name

    2. ◦

      a fee paid to Companies House on the re-registration of a company

    3. ◦

      a penalty paid in relation to the late filing of annual accounts under CA 2006, s 453,

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Jurisdiction(s):
United Kingdom
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Key definition:
Dormant Company definition
What does Dormant Company mean?

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

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