What are dormant company accounts and who can file them?

Companies Act 2006, section 1169(1): for the purposes of the Companies Acts, a company is "dormant" during any period in which it has no significant accounting transaction. Section 1169(2): a significant accounting transaction is one that section 386 requires to be entered in the company's accounting records. Section 386(3): accounting records must contain, in particular, entries from day to day of all sums of money received and expended by the company, and a record of its assets and liabilities.

SourcesThe law

Section 1169(3) disregards: any transaction arising from the taking of shares by a subscriber to the memorandum in connection with the formation of the company; and the payment of a fee to the registrar on a change of the company's name, on re-registration of the company, or for registration of a confirmation statement, or of a penalty under section 453 for failure to file accounts.

GOV.UK's summary is wider. It says significant transactions do not include filing fees paid to Companies House, penalties for late filing of accounts, or money paid for shares when the company was incorporated. Companies House's accounts guide follows the law more closely. It lists fees for a change of name, re-registration and filing confirmation statements (or annual returns), and a civil penalty for late filing of accounts. Where they differ, the law governs: it names only those three fees, not every filing fee.

SourcesThe law·GOV.UK·Companies House

Section 480(1): a company is exempt from audit for a financial year if it has been dormant since its formation, or it has been dormant since the end of the previous financial year and the conditions in section 480(2) are met. The conditions are that, for its individual accounts for that year, it is entitled to prepare accounts under the small companies regime (or would be, but for having been a public company or a member of an ineligible group), and it is not required to prepare group accounts. Section 480 is subject to section 475(2) and (3), section 476 and section 481.

Section 475(3): the balance sheet must contain a statement by the directors that the members have not required an audit under section 476, and that the directors acknowledge their responsibilities for complying with the Act on accounting records and the preparation of accounts. Section 475(4): the statements must appear on the balance sheet above the signature required by section 414. Section 476: members holding not less than 10% in nominal value of the issued share capital, or any class of it, may by notice require an audit. The notice may not be given before the financial year and must be given not later than one month before it ends.

Section 481 excludes a company that at any time in the year was a traded company, an authorised insurance company, a banking company, an e-money issuer, a MiFID investment firm or a UCITS management company, or carried on insurance market activity.

Companies House's model wording, for the statements above the director's signature and printed name: "For the year ending (dd/mm/yyyy) the company was entitled to exemption from audit under section 480 of the Companies Act 2006 relating to dormant companies. The members have not required the company to obtain an audit of its accounts for the year in question in accordance with section 476. The directors acknowledge their responsibilities for complying with the requirements of the Act with respect to accounting records and the preparation of accounts." A private company that qualifies as small should also include: "These accounts have been prepared in accordance with the provisions applicable to companies subject to the small companies regime." Section 414(3): the balance sheet of individual accounts prepared under the micro-entity provisions must contain, above the signature, a statement to that effect; the small companies regime statement is for accounts not so prepared.

SourcesThe law·Companies House

The form's guidance says it is only suitable for companies limited by shares which have never traded, and where the only transaction entered in the accounting records is the issue of subscriber shares. The form also says a fee or penalty raised on the company for an annual return fee, change of name fee, re-registration fee or late filing penalty "may be omitted from the company records and this DCA" if the payment was made by a third party without any right of reimbursement. That condition is the form's own wording. The law disregards those fees and section 453 penalties when deciding dormancy, with no condition about who paid them.

Companies House's filing options, by type of accounts: "Dormant | Software, WebFiling (if not previously traded)"; "For now, you can also file your company accounts online or send paper accounts to Companies House by post." Its online services file "dormant company accounts for companies that have never traded". Its WebFiling help lists "Dormant Company Accounts (DCA) AA02 suitable for companies limited by shares or limited by guarantee that have never traded". The GOV.UK software finder lists software that "can be used to file unaudited dormant accounts". Paper accounts must include a copy of the balance sheet signed by a director and showing the director's printed name, or Companies House will reject them. From 1 April 2028, paper filers "will need to use commercial software". The online service says: "From 1 April 2028, you must use commercial software to file accounts with Companies House."

SourcesThe law·Companies House