When can a Company be deemed as a Dormant Company?

A dormant company is one that has had no significant accounting transactions during the accounting period.A significant accounting transaction is defined as one that the company should enter in its accounting records.  Provided no such transactions occur, then the company can have a dormant company status. Companies House has defined only the following few, very specific transactions that the company may put through their records and still submit dormant accounts:

– Payment for shares by the subscribers to the memorandum of association.
– Fees paid to Companies House
– Payment of a civil penalty for late filing of accounts

If the company has any other transactions during the year, it will lose the dormant status.

Transactions like bank charges, earning interest on a bank account, Buying and selling or paying for any other will cause a company to lose dormant status since this too will be considered a
significant accounting transaction.

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