We briefly spoke about dormant companies in a previous article: What is a Dormant Company
Here is a further elaboration to the topic.
A company is considered dormant during a period in which there is no accounting transaction.
A company is considered dormant if:
- It has been dormant from the time of its formation
- It has been dormant since the end of the previous financial year
A company ceases to be a dormant company if there is an accounting transaction.
These activities are disregarded as accounting transactions when considering whether a company is active:
- Allotment and subscription of shares by new of existing shareholders
- The appointment of a company secretary or secretarial fees
- The fees to maintain a registered office
- The cost to keep the company registers and books
- The payment of any fee or charge (including any fee, penalty or interest for late payment) payable under any written law
- The payment of any composition amount
A dormant company is exempt from audit requirements.
A dormant company will have to be audited if the following member or shareholders make a written request to the company during the financial year. The request must not be later than one month before the end of that financial year.
- Any member or shareholder of the company holding not less than 5 per cent of the total number of issued shares of the company (excluding treasury shares) or any class of those shares (excluding treasury shares)
- Not less than 5 per cent of the total number of members of the company (excluding the company itself if it is registered as a member) may, by notice in writing to the company during a financial year
When in doubt, seek legal advice or consult an experienced ACRA Filing Agent.
Yours Sincerely,
The editorial team at Acra Filing Agent
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