What is a dormant company?
What makes a company dormant?
Under section 1169 of the Companies Act 2006 a company is dormant during any period in which it has no significant accounting transaction, meaning any transaction that must be entered in its accounting records. Four kinds of transaction are ignored:
- Payment for shares taken by the subscribers when the company was formed.
- Fees paid to Companies House for a change of name or re-registration.
- Late filing penalties for accounts.
- Fees for registering a confirmation statement.
Anything else, such as a bank charge, a sale or interest received, ends dormancy for that year.
Companies House dormancy vs HMRC dormancy
The two tests are different, so a company can be dormant for one and not the other. Companies House uses the accounting test above. HMRC treats a company as dormant for Corporation Tax if, for example, it has stopped trading and has no other income, or is a new company that has not started trading. HMRC's guidance lists buying, selling, renting property, advertising, employing someone or getting interest as activity. Being dormant for HMRC does not remove the duty to file accounts and confirmation statements with Companies House.
Where do you see it in real accounts?
Dormant accounts are a balance sheet with a few notes and no profit and loss account. Small dormant companies do not need an auditor's report. On the register the accounts category reads "Dormant", and many dormant companies give the SIC code 99999 "Dormant Company" as their nature of business. In iXBRL filings, dormancy is usually also flagged with a true or false business tag (EntityDormantTruefalse in the FRC taxonomy).
The company status stays "Active". Dormant is not a register status, and a dormant company is not being struck off unless it stops filing.
Worked example
Example (illustrative, not a real company): a company is formed on 3 March 2025 with one £1 share. The founder pays £1 for it into a bank account that charges no fees, and nothing else happens.
| Dormant balance sheet at 31 March 2026 | £ |
|---|---|
| Cash at bank and in hand | 1 |
| Net assets | 1 |
| Called up share capital | 1 |
| Total equity | 1 |
The subscriber's share payment is disregarded, so the company is dormant for its first period. If it pays a £5 bank fee, that is a significant accounting transaction and it is no longer dormant for that year.
Why it matters when checking a company
Dormant accounts tell you a company did nothing in the year: no trading, no assets in use, no employees. If an invoice, a website or a contract claims trading activity during a period covered by dormant accounts, the two do not match, and that deserves a question.
Dormant companies are common. On 1 October 2026, 559,853 active companies (10.8%) had last filed dormant accounts, and 2.4% of those were overdue (see the data). Many are name-holding companies, unused group subsidiaries or businesses that have not started yet.
You can check any company's latest accounts type before you trade with it.
Common confusions
- Dormant is not dissolved. The company still exists and can restart trading at any time.
- No need to notify Companies House on restart. The next non-dormant accounts show the change.
- Dormant subsidiaries may not file at all if their parent guarantees them under section 448A; their category shows "Filing Exemption Subsidiary".
Sources
- Companies Act 2006, section 1169
- GOV.UK: Dormant for Companies House
- GOV.UK: Dormant for Corporation Tax
- Companies Act 2006, section 448A
FAQ
Does a dormant company have to file accounts?
Yes. Every limited company must deliver accounts to Companies House each year, trading or not. A dormant company that qualifies as small can file simple dormant accounts, a balance sheet and notes, without an auditor's report. It must also file a confirmation statement at least once every 12 months. Dormant subsidiaries guaranteed by a UK parent can be exempt from filing.
Is a dormant company the same as a non-trading company?
Not exactly. "Dormant" in company law means no significant accounting transactions at all. A non-trading company, such as a holding company receiving dividends or a company earning bank interest, is not trading but does have transactions, so it is not dormant for Companies House. The Companies House SIC list has separate codes: 99999 for dormant and 74990 for non-trading.
How do I know if a company is dormant?
Look at the accounts category on the Companies House register or the filing history: the last accounts will be described as dormant. The SIC code 99999 is another hint, but it is chosen by the company and may be out of date. The accounts tell you about the past year only; a dormant company can start trading the next day.
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