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Dormant Companies

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Audit exemptions for dormant companies and LLPs

A company or limited liability partnership (LLP) is dormant if it has had no 'significant' accounting transactions during a financial year. A significant accounting transaction is one which the company or LLP should enter in its accounting records.

Some dormant companies and LLPs can't take advantage of audit exemptions. They include regulated financial companies and insurance market businesses.

If your company or LLP is dormant, you can generally claim an exemption from sending in audited accounts and need only prepare and deliver an abbreviated balance sheet and notes to Companies House.

A company does not have to include a profit and loss account and directors' report in dormant company accounts, but a directors' report must be provided to shareholders.

Unaudited dormant accounts are much simpler than those of a trading company or LLP. However, they must contain:

  • an abbreviated balance sheet stating that the company or LLP was dormant throughout the accounting period
  • any previous year's figures for comparison
  • notes to the balance sheet - covering a wide range of information (the information required differs for companies and for LLPs)

The right to prepare a dormant balance sheet for filing at Companies House does not affect a company's or LLP's obligations to prepare full accounts for its members.

Remember that if your company or LLP starts trading again, full accounts would then be needed for that period and you might need to appoint auditors.

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