What does 'dormant' mean under the Companies Act?
By DormantFile · Updated 28 March 2026
Under the Companies Act 2006 (section 1169), a company is dormant during any period in which it has no significant accounting transactions.
What counts as significant?
A "significant accounting transaction" is any transaction that must be entered in the company's accounting records. This includes:
- Receiving money (even bank interest)
- Making payments (even small ones)
- Issuing invoices
- Buying or selling anything
What doesn't count?
Two specific transactions are excluded:
- Shares taken by subscribers on formation — the initial share capital paid by founding shareholders when the company was incorporated.
- Fees paid to Companies House — such as the annual confirmation statement fee or the filing fee for accounts.
These are the only exceptions. Any other transaction — no matter how small — means the company is not dormant.
Why the definition matters
If your company qualifies as dormant, you can file simplified dormant accounts instead of full accounts. Filing dormant accounts for a company that is not actually dormant is an offence.
Note that HMRC uses its own slightly different definition of dormant for Corporation Tax purposes — see our full guide for the comparison, or run our free Am I dormant? checker to get a verdict for both regulators in eight questions.
Both filings still apply
Even dormant companies must file accounts to Companies House and (if registered for Corporation Tax) a CT600 to HMRC. We handle both — see how it works.
Read the full guide: How to check if your company is dormant