Where To Know More About Dormant Company

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by: jackjreynolds
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the company which does not involve in any account transaction during a financial year is called as dormant company. there is no accounting records in this company. to protect the name of the company so that no one else can use it is the main aim of the company. certain companies would stop working but would like to continue in the future. this is considered to be a non- business period and during this time, the companies prefer dormancy.

Why one should opt for dormant company?

trade mark and brand name are certain things which many of them wish to have and hence they prefer dormant company. competitors are more in this field and they might use the brand name and trade mark of the company before the original company uses it. there is no specific time limit for a company to be in dormancy. Another common cause for a dormancy is the lack of sufficient financing to the company. As a result of which the particular company has to shut down itself. once the company decides to resume, it can get into dormancy without allowing anyone to use its trade mark or brand name. clear document should be produced legally by the director or the head of the company to be in dormant form.

You must be able to assure an annual return to the house of companies, although you are in dormant form.
a file on the annual accounts should be produced by all dormant companies. Even if a company is not trading during a year, they have to submit an accounts file.
Form DCA can be used in the financial year by the dormant companies without trade.
If there is a change in address, then it must be informed to the house of companies.
During the dormancy period, a company cannot do, even a single transaction, otherwise it has to produce a file for the same. there are few restricted zones where companies can make transaction and they are civil penalty of any kind, company name registration and payment to shareholders.

once the company starts trading, is not required to inform the house of companies, for a dormany company because it will already submit the files of transactions. they have to face their directors and justify their failures if they fail to produce the details of transactions. in such cases, the company may suffer severe civic penalty since its an offence.

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Also gather more details on dormant company and llp dormant accounts.

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