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Post Info TOPIC: Is it Dormant Company or Active ?


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Is it Dormant Company or Active ?


Hi

I am seeking a reply for this particular scenario.

Client A had several transactions worth of several thousand quids in his business bank account. There were cash deposits as well as cash withdrawls.

I was questioned him what were these transactions? He told deposits are loan for this particular company.

Cash Outgoings are repayemnt of loan.

In summary this company does not have sales revenue at all.

My question is whether this company needs to file as dormant or active company?


Expecting a response.


Thank you


Roman


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dddd


Guru

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Hi
My view of it would be that if there are transactions then the company must be active. Sounds a bit suspicious to me though, have you carried out MLR checks.

Regards
Mark

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M & G Associates

Website www.mgassociates-accountancy-services.co.uk/

Accountancy Services Plymouth, Bookkeeping Payroll Sage Training

 



Guru

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Does seem strange but there may well be a good explanation, never judge a book by its cover!

The company is dormant as it has not traded or provided a service for a fee. Strangely enough, if you own a leasehold flat and pay service charges to your company to then pay the costs related to the communual areas, this is also seen as dormant! I know you won't believe me but its true! 

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Member

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Per Companies House guidance, a company is only dormant if the 'only' transaction entered into the accounting records is the issue of subscriber shares (in the first year) or non-significant costs that are required to keep the company registered at companies house.

The company in my opinion would be classed as a non-trading company. A company can be non-trading in the sense that it is not doing business. However, it may still have other accounting transactions going through its books, which means that it is not dormant in a legal sense. Non-trading companies are treated differently to a dormant company which can simply file form DCA each year (a non-trading company can't do this). A non-trading company will need to file abbreviated accounts, although they will have little information in them.

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Trevor


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Thank you for your prompt reply.

I have requested the loan agreement and the loan provider details.

What else we need to do in order to do MLR test?

Are there any checklist to do MLR?

Thank you


Regards
Roman

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dddd
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