How to Register a Dormant Corporation

Contracting through your own limited corporation is likely the best option. You'll have more liberties, and you'll be able to keep more of your hard-earned money. Despite its advantages, there may be occasions when you want to discontinue functioning as a limited company for a while. Whatever the reason, it's critical to understand how to appropriately put your business on hold.

What is the definition of an inactive business?

A dormant company is one that has been registered with Companies House but is no longer trading or earning money. You have the option of making your Company dormant immediately or after a period of activity. If it engages in any form of trading activity or makes income after the dormancy period has ended, it will lose its inactive status.

Why should I close down my business?

There are a variety of reasons why a contractor might desire to declare their business dormant. If you wish to take a vacation from contracting and return to full-time employment for a while, registration can help. Alternatively, you could choose to set up a limited liability corporation (LLC) for future use.

How do I put my business on hold?

To do so, you must first notify your local Corporation Tax office in writing of the date your company became dormant or will become inactive. If your firm was formerly active, HMRC will request a Company Tax Return. Before your business may be considered defunct, you must send this to HMRC over the internet. You'll also have to pay back any unpaid Corporation Tax.

You'll need to close your payroll and make sure any outstanding expenses are paid before your firm is declared dormant.

What are my responsibilities?

There is no time restriction for declaring your company dormant, but you must fulfil certain duties after your limited company is registered.

Annual accounts must still be filed with Companies House. This statement will include all of your company's important dates, as well as director information and information about any shares that have been issued. You cannot have paid staff if your company is declared defunct. Similarly, you can't pay dividends to shareholders without reactivating the business.

How can SJD assist?

It's not always easy to get the finest advice for your limited corporation. We are well-positioned to provide continuing support with your company's finances as the UK's leading contractor accountants.

Croydon accountants help small businesses & startups with their accounting and taxation matters, bookkeeping to keep their business running perfectly.