Re: Balance *** for a dormant company

On 29 July, 11:04, "Richard" <some_em...@xxxxxxxxxxxx> wrote:
"PeterSaxton" <pe...@xxxxxxxxxxxxxxxxx> wrote in message

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On 29 July, 09:37, "Richard" <some_em...@xxxxxxxxxxxx> wrote:



"Richard" <some_em...@xxxxxxxxxxxx> wrote in message

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"Paul Harris" <nos...@xxxxxxxxx> wrote in message
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In message <7d7n1sF2arl7...@xxxxxxxxxxxxxxxxxx>, Richard
<some_em...@xxxxxxxxxxxx> writes
It's a private limited company.

What transactions then make a company dormant or not? Explain in more
detail
by examples or whatever.

There is information available from Companies House.

A company is dormant if it has had no 'significant accounting
transactions' during the accounting period. A 'significant accounting
transaction' is one which the company should enter in its accounting
records.

The amount paid for shares on the formation of a company and a few
costs
that the company may incur in order to keep the company registered at
Companies House do not count as significant accounting transactions

A company can be non-trading in the sense that it isn't doing business.
But it may still have other accounting transactions going through its
books, which means that it is not dormant in a legal sense. A dormant
company must not have any accounting transactions except specific
allowable transactions that can be disregarded,

Disregard:
payment for shares taken by subscribers to the memorandum of
association;
fees paid to the Registrar of Companies for a change of company name,
the
re-registration of a company and filing annual returns; and
payment of a civil penalty for late filing of accounts.

Companies may be dormant for various reasons, for example, to protect a
company name, in readiness for a future project, or to hold an asset or
intellectual property. Some flat management companies whose main
purpose
is to own the head lease or the freehold of a property choose to become
dormant by setting up a residents' association to deal with any
expenses.

A company can remain dormant for as long as necessary - indefinitely
if,
for example, its purpose is just to prevent the name being used by
another company. However, there are expenses associated with keeping a
company on the register. In particular, there is an annual
document-processing fee payable on delivery of an annual return. The
fee
is £15 when you submit it electronically, or £30 when you submit it on
paper). While the company is dormant, it must still prepare and submit
various other documents including annual company balance sheets to
Companies House. The company will have to decide how to meet these
expenses and who will run the company and be responsible for ensuring
that it meets all the legal requirements.

--
Paul Harris

Hi. Thanks, I now begin to understand this stuff.

http://www.companieshouse.gov.uk/about/pdf/gba10.pdf

I have in fact just been protecting a company name and am still planning
much of the business.

I thought I had three options but now I think I have two.

a) Say that the £50 I put in bank was share monies. I *cannot do this*
because authorised capital is only £10. I cannot say shares were sold at
a
premium, because selling shares at a premium is not allowed (I feel
sure).

b) Say that I paid in £10 for the share issue which was 10 shares at £1
each. That would mean the other £40 would in the bank would simply be be
disregarded. If it was not disregarded there would be an unbalance
beteen
Net Assets and Shareholders Funds:

Authorised Share Capital: (Number:10 - ShareType:Ord - Value: £1

Called Up Share Capital Not Paid: ........£0

Current Assets: (In bank & in hand): .....£10

Net Assets: .......................................................£10

Issued Share Capital (Total Shareholders Funds):
(Number:10 - Share Type: Ord - Value: £1..... .£10

During the year, the company allotted 10 ordinary shares

with an aggregate nominal value of £10

the consideration received by the company was £10

c) Say no monies were paid for shares, disregarding the £50 as a
necessary
technical transaction to open up the account:

Authorised Share Capital: (Number:10 - ShareType:Ord - Value: £1

Called Up Share Capital Not Paid: ........£0

Current Assets: (In bank & in hand): .....£0

Net Assets: .......................................................£0

Issued Share Capital (Total Shareholders Funds):
(Number:0 - Share Type: Ord - Value: £1..........£0

There is a fourth option: I terminate my business account.

Anyone have any opinions on what to do here, which fiigure to use, the
£0
or the £10 figures?

For the sake of correctness: Dormant Company Accounts *cannot* have a
balance of £0.

What does "balance" mean?

Issued Share Capital is taken as what has been agreed to be taken,
recorded
in Memorandum of Association.

Therefore, where no monies has been paid for shares, thus no monies in
bank,
Called Up Shares Not Paid has to be recorded with a figure that matches
Issued Share Capital, even if Shares were not called for. Unless this is
so,
there cannot be a balance where shares have not been paid for.

The shares have to be called up.

You can have a balance *** with shares not paid for.

Where do you get all this from? You seem to be making it up.

--
It's a matter of logic.

http://www.companieshouse.gov.uk/about/pdf/gba6.pdf

"A company may increase its issued share capital by issuing additional
shares. Shares are "issued" when a person is registered as a member in the
company's register of members."

If what is meant by Issued Capital is as above, then in Dormant Company
Accounts, Shareholders Funds cannot be less than £10. Consequently, in order
to have a balance, since in the hypothetical case since there is no money in
the bank, Called Up Share Capital Not Paid must be £10, to get a Net assets
figure of £10, whether a call was made or not.

You said this:

there cannot be a balance where shares have not been paid for.

This is what doesn't make sense to me.
.

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