A dormant company is one that has been incorporated at Companies House, but is not currently carrying on any kind of business activity or receiving any form of income.

HMRC considers this type of company to be dormant (inactive) for Corporation Tax purposes. A company can be dormant from the date of its incorporation, or it can become dormant after a period of trading activity.

There are many reasons why a company may be dormant, such as:

• reserving a company name whilst preparing to launch the business
• protecting a trading name, to prevent it from being registered by another business
• restructuring a previously active business
• when an owner requires an extended period of time off due to illness, maternity leave, travel, a sabbatical, or any other reason

Your company can remain dormant for any length of time, but you must tell HMRC as soon as possible and maintain a number of statutory obligations for Companies House.

For further information, please see this blog article.