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Incorporating a dormant company


Dormant companies are, simply put, limited companies which have ceased to trade for an undefined amount of time. Going into a period of dormancy is best for companies that do not want to wind-up, but need a break. 




Incorporating a dormant company:


Dormant companies are becoming more and more common in the UK’s start-up scene. Simply put, dormant companies are businesses which are not currently trading and so they are susceptible to VAT amongst other forms of taxation and company officers have fewer annual requirements than those of a trading company. Note: you can leave dormancy and start trading again whenever you like - if you make this clear to HMRC. This can be done via the confirmation statement, which you can read more about here.


Companies House route:


Forming a dormant company via Companies House is a very similar process to forming a limited company that will immediately begin trading. At the point of incorporation, all companies are considered dormant until they inform HMRC they have begun trading – this is done via the CT41 form. To remain dormant, you simply must submit dormant company accounts and mark on your confirmation statement that you will continue not to trade.


Formations agents route:


As formations agents fill out the majority of forms for you in the incorporation process, you will need to make clear to your chosen agent that you wish for the company to remain dormant post-formation. With some formations agents, you will not have the ability to simply form a dormant company and may have to contact customer support to your your intentions clear. A benefit to working with Smarta is that we allow you to specify that you wish to form a dormant company from the get go. Again, when it comes to filling your annual confirmation statement, you must make clear to HMRC that your company remains in dormancy.


If you wish to incorporate a dormant company, you can do so today with Smarta. In our application process, we an option for you to request that your business remains dormant – ruling out any possibility for error, and meaning that you do not need to specifically contact customer support to inform us of your intentions. 




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