Annual Accounts for Dormant Company

Companies House can treat your company as ‘dormant’. Dormancy means you make no ‘significant’ transactions in the financial year that you would usually report.

The significant transactions of dormant companies would not include:

• Any filing fees paid out to Companies House.
• Financial penalties for the late filing of accounts (see below).
• Payments for shares when the company got incorporated.

If a dormant company qualifies as a ‘small’ company there would be no need for an audit. You may also want to check if your inactive company is also dormant for Corporation Tax purposes.

Note: A small company, or micro-entity, must still prepare statutory accounts and send them to HM Revenue and Customs as part of the Company Tax Return (and to its members).

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Annual Accounts Small Limited Company

Companies House would class a business as a ‘small company’ if any two (2) of these situations apply:

• Its turnover is not more than £10.2 million.
• It has no more than £5.1 million on its balance sheet.
• The organisation does not employ more than fifty (50) employees.

Being classed as a ‘small’ company means you would be able to send an abridged set of accounts to Companies House. Abridged accounts contain a much simpler balance sheet (with any extra notes attached).

Even so, the balance sheet must display the name of a director printed on it. One of the directors must also sign the document.

Another advantage of sending abridged accounts is having less company information available to the public. You would also be able to:

• Avoid audits by taking advantage of the audit exemption for private limited companies.
• Choose whether to submit a copy of the director’s report and send a profit and loss account (or not).

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Annual Accounts Micro Entity

Having micro entity status means the business is one of the very small types of companies. Companies House would class a business as a micro-entity if any two (2) of these situations apply:

• Its turnover is not more than £632,000.
• It has no more than £316,000 on its balance sheet.
• The organisation does not employ more than ten (10) employees.

Some advantages of running micro-entities in the United Kingdom include being able to:

• Benefit from the same exemptions that are only available to ‘small size’ companies.
• Prepare a simpler set of accounts that still meet the statutory minimum requirements.
• Send a balance sheet to Companies House that only contains very basic information about the company.

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Note: The government produces a publication titled ‘filing your company’s accounts‘. It explains the rules and requirements on filing annual accounts for micro-entity, small, medium, or dormant companies registered in the United Kingdom.

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