Dormant company accounts are financial statements that a company must submit to Companies House to declare that it is inactive and has not engaged in any trading activities. These accounts confirm that the company has not had any significant accounting transactions during the financial period, meaning it has had no income, expenses, or other financial activities that need recording, apart from permitted exceptions.

 

The purpose of filing dormant accounts is to maintain the company’s compliance with statutory requirements while it remains inactive. Filing these accounts also serves to show that the company has not been dissolved and still exists as a legal entity.

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Every company in the UK is legally required to file annual accounts with Companies House, regardless of whether it is actively trading or dormant. A company must file dormant accounts if:

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• It has never traded since incorporation.

• It has ceased trading and has remained inactive for a complete financial year.

• It is being kept inactive for strategic purposes, such as securing a company name or holding intellectual property.

 

Companies that qualify as dormant may continue to file dormant accounts until they become active again, at which point they must switch to filing full statutory accounts.

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Dormant company accounts are considerably simplified compared to the detailed statutory accounts filed by active companies. They typically consist of the following elements:

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1. Balance Sheet: The balance sheet is the primary document required for dormant accounts. It is a snapshot of the company’s financial position at the end of the financial year and will show assets, liabilities, capital, and reserves. For a dormant company, the balance sheet is very simple and often contains minimal figures.

2. Notes to the Balance Sheet: Brief explanatory notes to provide further clarification about any figures shown in the balance sheet, although these are minimal for dormant companies.

3. Statement of Financial Position: The statement confirms that the company was dormant throughout the financial year.

4. Signature and Approval: The balance sheet must be approved by a director of the company and signed on behalf of the board.

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Important Note: Dormant companies do not need to file a profit and loss account, cash flow statement, or directors' report.

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​Step-by-Step Overview of Dormant Company Accounts

Below is a breakdown of each section included in dormant accounts and what it typically looks like:

 

1. The Balance Sheet

The balance sheet for a dormant company is a very simplified document that generally contains only a few entries. It might look like this:

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Explanation of common line items for a dormant company that has never traded:

• Fixed Assets: Usually £0 for a dormant company, as it does not hold any tangible assets.

• Current Assets: These might include a small amount of cash (often £1), typically reflecting the original share capital issued when the company was incorporated.

• Creditors: Often £0, indicating no outstanding liabilities.

• Share Capital: Represents the nominal value of shares issued when the company was incorporated.

• Profit and Loss Account: Often £0, as the company has not traded or generated any income or expenses.

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Note that dormant companies may have traded in the past, in which case the line items mentioned above may have figures that reflect the end balances when the company stopped trading and then became dormant. In this case, you would expect the figures for the current year to be equal to the figures of the prior year.

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2. Statements (statutory declarations)

Statutory statements must be included on the balance sheet making various declarations about the dormancy status, audit exemption, directors' responsibilities and accounting standard used. A couple of them might be phrased as:

 

"For the year ending 31 March 2023, the company was entitled to exemption from audit under section 480 of the Companies Act 2006 relating to dormant companies."

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​"These accounts have been prepared in accordance with the provisions applicable to companies subject to the small companies regime."

 

3. Notes to the Balance Sheet

A note about the number of employees is mandatory. Other notes may be required, depending on historic activity. Optional notes may include:

• Confirmation that no trading has occurred.

• Details of the share capital issued at the time of incorporation.

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4. Director’s approval and signature

The balance sheet must be signed by a director, with their name printed alongside their signature. A statement confirming the approval might read:

 

"Approved by the board of directors and signed on behalf of the board on 30 April 2023.

Director: John Smith"

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Click here to download an example of dormant company accounts.​