A Dormant Company is a company that is not involved in any financial activity, transaction, or buying and selling. Still, they are present in the market and they can retain their name, logo, and trademark. A company can be dormant from the start or they can convert them when they want.
Dormant companies serve as placeholders for future ventures or to protect properties like trademarks, patents, or business names.
It is important to learn about dormant companies if you are working in this field. These companies simply refer to a company that is not included in any financial activity.
In this article, we will learn about dormant companies in detail.
Let’s get started without any further delay.
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What Is The Concept Of Dormant Companies?
A dormant company does not have any active work or financial activity but still, it can be active by maintaining records and submitting statutory fillings
The main concept of dormant companies is to retain their properties without being active in the market. A company can be out of the game of business but still, they can exist without investing or doing any trade. This is done to retain the name, logo, or trademark of the company.
A person can start a company and retain its name but if he doesn’t want to start a financial transaction then he can turn his company into a dormant company.
Can A Dormant Company Trade?
If a company turns dormant then it can’t do any kind of trading. Any type of financial activity is not allowed in a dormant company
Trades including:-
Buying and selling goods and services
- Leasing or buying property
- Employing staff
- Paying directors’ salaries
- Managing investments and receiving dividend payments
- Issuing dividends to company shareholders
- Earning interest or paying bank charges
How Can You Make Your Company Dormant?
If you want to register your company in a dormant companies segment then you have to submit a written application to HMRC. You have to mention the date on which your company became dormant.