How do I form a dormant company?

A dormant company is one that is not currently taking part in any trading activity. However, a business owner can’t simply say that their limited company is dormant, it is a status that requires a few steps.

The company formation process itself contains minimal mention of the word ‘dormant’. This is because a dormant company is formed in the same way that a trading company would be. You still need to choose a unique company name, select a registered office, and appoint your directors, shareholders, and people of significant control.

Company formation SIC code

The only section of the process that allows you to allude to your upcoming dormant status is when selecting your SIC (Standard Industrial Classification) code. This 5-digit number is used to let Companies House know what you intend to do with your company. And yes, there is a code for dormant companies; 99999. 

• What is a limited company SIC code?

So, the first thing you need to do is select the appropriate SIC code in the company formation process.

Notify HMRC of your dormant status

HMRC will send a letter to your registered office a few weeks after your company has been formed. This letter will contain your Unique Tax Reference as well as the contact details for your Corporation Tax office. 

• Companies House and HMRC – what are their roles in limited companies?
• What is a company’s Unique Taxpayer Reference (UTR)?

You now need to write to HMRC using the contact details in this correspondence, letting them know that your company is dormant. They will typically be in contact within 15 days, confirming receipt of this letter.

File your confirmation statement and dormant annual accounts

It doesn’t matter if your company is trading or dormant, you still have filing obligations with Companies House. Failure to comply with these can result in penalties and eventual striking off.

The first confirmation statement will be due 1 year and 14 days after your company formation. Like when you formed your company, the only mention of ‘dormant’ will be when you review your SIC code. The first set of accounts for your company will be due 21 months after your company formation. Dormant companies can file a specific set of accounts, known as dormant company accounts.

• Our confirmation statement service
• Our dormant company accounts service

You must then continue to deliver a confirmation statement and annual accounts to Companies House on an annual basis, for as long as you wish to keep the company.

If and when you do start trading

There is no obligation for you to start trading with your limited company. You can maintain its dormant status by not trading, and continuing to file the confirmation statement and annual accounts on time. However, if you do decide to start trading, you need to notify HMRC within 3 months of starting.

So there you have it, how to form (and maintain) a dormant company. Please leave a comment if you have any questions.