Companies do not need to be trading 24/7, but instead, tactfully making your company dormant could actually help your business.

There are several reasons to why you’d want to make your company dormant. Here are a few of the most popular ones:

  • Company name: You might not be able to start trading yet for various reasons, but you are set on a company name. If you form a dormant company, you will, in essence, reserve your name. Due to the rules in naming your company in the UK, it will ensure that your chosen name will be yours in the future. It’s also a good way to get all your company information sorted at Companies House.
  • Business re-launch: If your company is going through a complete rebrand, you might want to put all your trading on hold whilst you’re doing it. Making your company dormant is the most efficient way of getting your company polished up for the big re-launch.
  • Business restructure: When you originally formed your company, you may have picked a certain company legal structure. However, it may not suit the purposes of your company now. As your company changes and develops, it is often easier to make your company dormant whilst restructuring your company as opposed to juggling trade and a restructure at the same time.
  • Personal reasons: We are human and we all have our reasons for having to step back now and again. To ensure your company is on record and ready to trade after your break, you can make your company dormant. This is a way that applies no pressure on you and gives you the opportunity to step back in when you feel ready.

That makes a bit more sense. If you’ve decided that you’re going to have a dormant company, then it’s important to understand what you can and cannot do with it.

Can…

  • Stay on the Companies House register
  • Continue with certain transactions e.g. payment of debt
  • Pay Companies House fees

Can’t…

  • Trade or generate profit
  • Have made any significant transactions during the company year. If it has, it is considered a non-trading company

To clarify, your dormant company can be made active quite seamlessly. Read our dormant company guide for more information or get in touch with our Company Secretarial team.