5 Easy Steps to File Dormant Accounts

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Other than accumulating interest, any account that has not been used for a long time is considered dormant. Following a specified period of inactivity, financial institutions are obligated by law to transfer funds from inactive accounts to the state treasury. Time requirements are different in each state.

Many financial accounts, such as checking and savings accounts, brokerage accounts, 401(k) s, and pension fund accounts, can go dormant. All limited companies registered need to file their accounts whether or not they are trading. All limited companies dormant since incorporation should find the simplest ways of filing dormant accounts using a web filing service.

 

Circumstances Where Accounts Become Dormant

 

1. Making use of a dormant limited company to shield a sole proprietorship

For sole proprietors, the most prevalent benefit of having a dormant company is the added liability protection it provides (also commonly referred to as being self-employed). There are several benefits that sole proprietorships can give small businesses that a limited liability company cannot.

For obvious reasons, most new businesses start as single proprietorships since doing so is less complicated and more affordable. If you're a sole proprietor, no one can form a limited liability corporation with the same name as your business unless you've trademarked it.

 

2. Safeguarding Your Limited Liability Company If You Plan To Cease Trading For an Extended Period

If you already have a limited company in place, but you're going to be inactive for a while, a dormant company could be a good option. You may be a successful business owner who must temporarily relocate abroad. Keep your business operations picking up where you left off?

The biggest problem of maintaining a limited business is the high cost of hiring an accountant to prepare and file company accounts with Companies House each year. Dormant status for a limited liability corporation allows its owners to put off paying annual fees and avoid the hassle of winding down business operations. An accountant can help you determine the best course for placing your business into hibernation.

 

Step-By-Step Ways of Filing Dormant Accounts

An annual asset of accounts filing is required of all firms, even those that have never conducted business. Directors of corporations would do well to keep tabs on filing deadlines to avoid the fines that may result from failing to submit annual reports and other financial documents on time.

 

1. The first step is to Sign in

Once you have signed in, you will see the overview of your company. Check the next accounts made up to date match the made date of the accounts you are filing. If you need to change the date by more than seven days, click the changing accounting reference date link. You will need to wait for confirmation of your reference date link. Before submitting your accounts, you will need to wait for confirmation that your reference date has been changed.

 

2. If the date is correct, select the file company accounts button

On your account screen, select the dormant company accounts option. Ensure that your company can file the accounts type by reading the conditions. Click the file dormant company accounts button. The balance sheet is automatically pre-populated with the expected made-up date for the accounts. You can change this date up to seven days on either side. You can now select the required currency and complete the relevant fields.

 

3. Enter the current and previous year's figures

Only the current period will be displayed if your company submits its first-year accounts. Leave the fields blank or enter zero if there are no figures available. Do not enter any other digital punctuation, such as the dash. Net assets will total automatically. Additional help can be found by clicking any of the green information icons.

 

4. Enter details of the number and types of shares

By either typing in your share class or clicking select and choose one from the list, then enter the value. Check the statements to confirm that the company is eligible to submit dormant accounts. Read the balance sheet note and only tick if the company has acted on behalf of someone.

 

5. Enter the date the accounts were approved

You will have to provide the name of at least one director. If you are happy that all the information you have provided is correct, click validate and continue. Review the accounts you have prepared. If you need to make corrections, go back, or if everything is okay select print. Copy data for your records. Then click confirm and submit.

 Please note the submission number in case you have a query; you will receive two emails; one to inform you that the accounts have been received and the second to say that they have been accepted or rejected. Then log out. 

 

Bottom Line

After your company has been designated dormant, you will only be responsible for paying corporation tax or filing Company Tax Returns once you obtain specific instructions. You must file yearly reports and confirmation statements even if your business is dormant. Dormant small businesses may file "dormant accounts" instead of regular financial statements. They need not submit an audited financial statement.

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