What is a Dormant Company?

A dormant company is a limited company that's legally registered with Companies House but isn't trading and has no significant financial activity, no sales, no services, no investment income. It still has to be registered and kept up to date, even while it's doing nothing commercially.

Key Takeaways

• A dormant company is legally registered but has no trading or income-generating activity.
• Declaring dormancy can preserve a business name, cut admin, and reduce costs while keeping the legal structure intact for future use.
• Even while dormant, you still file a yearly Confirmation Statement and Dormant Company Accounts with Companies House.
• To stay dormant, you need to avoid "significant accounting transactions," no salaries, dividends, or trading, though the company can remain dormant indefinitely.
• Since November 2025, directors and PSCs also need to complete identity verification with Companies House, regardless of the company's trading status.

What Counts as "Trading"?

A dormant company can't trade or receive income without losing its status and being required to prepare full statutory accounts instead. Trading activities include:

• Buying or leasing property
• Buying and selling goods or services
• Employing staff
• Managing investments
• Paying or receiving dividends
• Earning interest
• Using the company bank account to cover accounting or legal fees

Why Would a Company Be Dormant?

Common reasons include:

• A new company that hasn't started trading yet
• An off-the-shelf or shelf company held by a formation agent for future sale
• A company formed to own an asset, like land or intellectual property, that will never trade
• A previously active company being restructured
• Reserving or protecting a business name ahead of launch
• A director taking time off for travel, illness, maternity leave, or a sabbatical
• A company no longer trading and heading toward being struck off

Even during an extended period of dormancy, the same core obligations apply: keeping company details up to date, filing annual Confirmation Statements and Dormant Company Accounts, and maintaining statutory records for public inspection.

How Do I Actually Report Dormancy?

To declare or switch to dormant status, contact HMRC's Corporation Tax office directly, using the details on GOV.UK or on any letter HMRC has already sent you.

If your company was previously trading, expect a "Notice to Deliver a Company Tax Return" covering the accounting period before it became dormant. Profits made before dormancy still remain liable for Corporation Tax, so settle any outstanding wages, dividends, or supplier debts before declaring dormant status.

What Do I Need to File With Companies House?

You don't need to separately notify Companies House that you're dormant. Filing your annual Confirmation Statement and Dormant Company Accounts serves as your effective notice.

Dormant Company Accounts. Your first set is due 21 months after incorporation if covering more than 12 months, then annually after that. Companies House sends reminders, but it's worth tracking the date yourself.

Confirmation Statement. This confirms your company's core details, business name, director details, registered office, SAIL address if you have one, secretary details if appointed, shareholder details, and share information. Your first is due 12 months after incorporation, and every 12 months after your last one.

What Do I Need to Do for HMRC?

Previously active companies must file a Company Tax Return covering the period before dormancy. Companies that have been dormant since incorporation are exempt from this. After notifying HMRC of your dormant status, you'll receive confirmation of any Corporation Tax due before the dormant period began.

Does Identity Verification Apply to Dormant Companies Too?

Yes. Since November 2025, directors and Persons with Significant Control must complete identity verification with Companies House, and this applies regardless of whether the company is actively trading. Our identity verification service can help with this.

FAQs

What is a dormant company in the UK?

A limited company registered with Companies House that isn't actively trading and has had no significant accounting transactions during the financial year.

Why might I make my company dormant instead of closing it?

It lets you keep the business name, protect your brand, or pause trading without dissolving the company entirely, while reducing ongoing costs and admin.

What transactions are allowed while a company stays dormant?

Only minimal ones: payment for shares at incorporation, Companies House filing fees, and late filing penalties. Anything else, bank interest, wages, sales, ends dormant status.

What happens when my dormant company starts trading again?

You'll need to notify HMRC and/or Companies House, begin preparing full annual accounts and Corporation Tax returns, and treat normal obligations as applying from the moment trading resumes.

What's the difference between a dormant company and a non-trading company?

A dormant company has no significant accounting transactions at all. A non-trading company might still have financial activity, bank fees or interest, for example, which means it doesn't qualify as dormant for accounting purposes.

This article is for general information only and does not constitute legal or tax advice. Companies House and HMRC requirements can change, so it's worth checking current guidance or speaking to a qualified professional before making decisions about your company's status.