Why Make a Company Dormant?

The most popular reason for owning a dormant company is to protect your business when you are operating as a sole trader (also commonly referred to as being self-employed). Operating as a sole trader offers small business owners several advantages over the limited company route.

What does it mean when a company is dormant?

A dormant company is one that has been incorporated at Companies House but is not currently carrying on any kind of business activity or receiving any form of income. ... A company can be dormant from the date of its incorporation, or it can become dormant after a period of trading activity.

Should I close my limited company or make it dormant?

Making your company dormant is the better option if you simply wish to take a break from running the business for a fixed or indeterminate period of time; if you want to test the waters with retirement or a new job; or if you have any doubts whatsoever about closing your company and having it struck off the register.