A company is regarded as being dormant in any accounting period when there is no significant accounting transaction has taken place. A dormant company is therefore a company that does not trade. It is important to note that a non-trading company will not always be dormant.
A significant accounting transaction is defined as any transaction required to be entered in the company’s accounting records other than taking of shares in the company by a subscriber under the company’s memorandum and the payment of fees necessary to maintain the records of a company to Companies House such as change of name, re-registration, late filing penalty and an annual return filing fee.
If the company has entered into an agency agreement, the details of the agreement and the transactions undertaken should be referred to an appropriate advisor when determining whether the company is indeed dormant.
For accounting periods ending before 26 July 2000 the only entry which can be disregarded is the payment for subscriber shares.
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