Dormant businesses don’t have any income or trading activities during the period. Therefore, they can hold inactive company accounts, simplified only to include balance sheets. Companies House allows dormant companies to file such types of accounts. Such accounts are advantageous to most dormant businesses as they will not have to hire accountants to prepare the accounts and save their money and time. However, all the inactive accounts have to be filed every year. In addition, dormant businesses are not exempt from meeting all the requirements to deliver the annual accounts to Companies House.
According to Companies House, the dormant company has no trading activities or notable transactions. Such companies are eligible to file inactive company accounts. This article will look at why companies may need dormant company account services.
Compliance with annual accounts obligations
All companies must do annual account returns. Dormant companies are not exempt and must comply with such rules or attract appropriate fines. Dormant companies are only exempted from corporation tax returns. Therefore, inactive company account services from trusted consultancies will help ensure that dormant companies have complied with the annual account returns. Yearly accounts for dormant companies are simple as they only include balance sheets and other crucial bank details.
Companies House provides a deadline for doing the inactive annual account return and which, if not meant, can attract appropriate penalties. In addition, your company is required to prepare an annual confirmation statement. The statement is essential in ensuring your business details are well updated. Therefore, dormant company account services play a crucial role in preparing such documents.
Preparations of Dormant Company Accounts
A dormant business will have to prepare an inactive company account. The dormant company account contains a statement proving that the firm has been dormant throughout the financial year, data and figures from the previous year, and a balance sheet. Preparation of such an account may be hectic and time-consuming, especially for an individual who lacks proper knowledge of accounts.
Therefore, dormant company accounts service will help prepare inactive company accounts accurately. This will help the company save on time and possible mistakes they would have made while preparing the accounts. In addition, in cases where you or your directors are busy with other issues, they may fail or not be in a position to prepare such accounts. Therefore, dormant company services ensure that the accounts are prepared and returned on time.
Meeting the filing dates and avoiding possible penalties.
Companies House and HMRC provide specific dates for filing the accounts and taxes. Failure to meet the dates may attract penalties that burden a dormant company. Therefore, hiring an inactive company account service can help ensure the company meets the given date of filing accounts and avoid penalties. To ensure the company adheres to the given rules and dates, dormant company account services set schedules and reminders and ensure they do the filing early enough on behalf of the company.
Failure to do the annual accounts return risks attracting penalties every month. Sometimes, you may fail to do your returns on time due to busy schedules and probably forgetting. Therefore, having someone provide such a service can be an added advantage and help save you from a severe problem.
Protecting the interest and reputation of the business
A dormant business is not a closed business. Therefore, the company needs to maintain its integrity and reputation as it looks forward to resuming its operations. A company that fails to meet the required account standard may face a problem in reactivating the business after a dormancy period. Therefore, dormant company account services ensure that your company meets all the criteria necessary to maintain its standard.
In addition, if you want to operate your business in the future, you need to put your business into dormancy to deter other individuals from registering the same name as yours. Most dormant company account services will ensure a proper follow-up on the registration of your inactive business and the relevant accounts. This will help protect your interest as an entrepreneur.
Dormant company account service will help you set up your company.
If you have a better business idea you want to invest in in the future, then dormant company account services can help dormantize your business and help you set up when you are ready. Once you have formed your business, you can put it into dormancy for a short time before you start trading. The dormancy period will help you prepare adequately and structure your company. Dormant company service will ensure you have met all the requirements to put your business into dormancy.
They will ensure you have acquired all the required documents and followed the registration process adequately. In addition, they will ensure that during the period, your business has made all the required returns on time. This will ensure that there will be no barrier to deter you from starting trading when you’re ready.
Final thoughts
Dormant company account services are beneficial. If you have dormantize your business, you can sort for these services. They will ensure smooth registration of all your inactive company accounts and provide all the returns to be filed accordingly. However, it is advisable to research the best consultancy agency when seeking these services.
