What is a dormant company?
A dormant company is a registered company that has had no “significant accounting transactions” during a financial year — essentially, it is not trading. It still legally exists and stays on the register, but because it is inactive it can file simplified dormant accounts and is treated differently by HMRC. “Dormant” is about activity, not a separate company type.
Dormant for Companies House vs HMRC
The two bodies define dormancy slightly differently. For Companies House, a company is dormant if it has had no significant accounting transactions in the period — routine items like filing fees and shares taken on incorporation do not count. For HMRC (Corporation Tax), a company is dormant if it is not carrying on business activity, trading, or receiving income.
A dormant company must still file a confirmation statement every year and file (dormant) accounts. Failing to file leads to penalties and, ultimately, the company being struck off.
Why companies are kept dormant
Common reasons include holding a brand name or trademark, reserving a company name for future use, holding an asset such as property, or pausing a business that may restart later. Newly-incorporated companies that have not yet started trading are also dormant until their first transaction.
Frequently asked
How can I tell if a company is dormant?
A dormant company often files dormant accounts and may use SIC code 99999. Its company status on the register usually still shows as “active” — dormancy is about trading activity, not registration status.
Does a dormant company pay tax?
A genuinely dormant company with no income has no Corporation Tax to pay, but it must still meet its filing obligations to Companies House.
Can a dormant company start trading again?
Yes. A dormant company can begin trading at any time; it should tell HMRC within three months of starting business activity.
Is “dormant” the same as “dissolved”?
No. A dormant company still exists on the register; a dissolved company has been closed and removed. See our guide on company status.
Related guides
- Company status explained (Active, Dissolved & more)
- How to find a company’s accounts
- What is an SIC code?
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