The legal documents you need for your EMI share option scheme
Read our expert step-by-step guide on all the legal documents you need for your EMI scheme, and how to easily create and...
We’ve been receiving a lot of queries from founders on how they can make their companies dormant instead of shutting down by liquidating or applying for administration.. In this article, we’ve listed out the most common questions we receive regarding what a dormant company is, what you need to do to make your company dormant and more importantly, how you can resume business.
If you’re a company that has incorporated and registered at Companies House, you can make your company dormant at one of two times:
For example – you’re taking time off work, focusing on what you need to do to sort out a minimum viable product or you’ve come up with this unique name for your company and don’t want anyone else to take it while you’re figuring it out!
Examples of when a company can be dormant are:
A company is dormant when it has no significant accounting transaction. Every company needs to maintain their financial records with a true view of the cash in and out of the business so when this flow of money stops – you can apply to be dormant.
If you’re dormant, only the following transactions are permissible:
Once you’ve sorted out the company accounts and all outstanding payments, write to your local Corporation Tax Office and indicate the date from which the company will be made dormant.
HMRC will send you a ‘Notice to Deliver a Company Tax Return’. You need to complete this form and file it along with any payments owed.
Some points to remember:
The short answer: yes. You have to file the company’s confirmation statement (previously, the annual return) and the annual accounts with Companies House even after the company is dormant. Your reporting dates stay the same for annual returns and accounts.
If your company satisfies any two of these conditions- a turnover of up to £10.2 million, 50 employees or less, or £5.1 million or less on the balance sheet- it’s a small company. Different rules apply to you:
You can file your dormant accounts using the webfiling system on Companies House or submitting form AA02.
From March 25, 2020 you can apply for a 3-month extension for filing your accounts per the latest guidance.
Questions? Let us know!