I have just incorporated a Holdco and Opco. The Holdco owns intellectual property and 100% of Opco. The Holdco does not need to make any transactions so I am considering making it dormant.
However, Companies House notes a statement of capital following allotment of shares. I had 50 shares at £1 and my business partner has 50 shares at £1.
My Articles of Association state that "all shares must be fully paid up" but goes on to state "this does not apply to shares allocated at formation to subscribers of this memorandum".
Do I need to pay for these shares now and if the company is dormant without a bank account how do I do this correctly. For example, keeping cash on the premises (£100) and putting it on the balance sheet as cash in hand?
Any assistance is greatly appreciated!
Josh
Replies (30)
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Who's coming to check the company's cash in hand ?
How will anyone know from your accounts whether the cash is in the bank or the petty cash tin ?
Receiving money for shares does not mean that your company isn't dormant.
I still don't get why folk are so anxious to be dormant.
FRS 105 accounts are pretty much dormant accounts.
Josh - tell us why you want a dormant company. What's your plan ?
The holding company was setup so I could assign some IP I was working on to it (for protection purposes) and this is being licensed to the Opco (can be licensed at no cost) to exploit.
The holding company is there only to protect IP so I was thinking about making it dormant if permitted.
Many thanks
Dormant for HMRC purposes or dormant for Companies House ?
Confusingly, they now use the same word to mean different things. Folk might be answering a question you didn't intend to ask.
Dormant for HMRC purposes as I don’t intend this company to have any financial transactions. However, I can’t see the distinction between being dormant at Companies House and HMRC for a small company.
Much appreciated
HMRC Dormant means not trading and no tax to collect.
Companies House Dormant means absolutely no transactions at all, subject to a handful of exceptions.
So buying an asset of any kind, but just holding it, means you can be dormant for HMRC. But you're not dormant for Companies House. You've bought something.
If you're only interested in HMRC, just tell them you're not trading. If they send you a return form, which they will from time to time, just to check you're still not trading, ask them to withdraw it on the grounds that you're not trading. They have the option of refusing; if they do that, just fill it in with a load of zeroes.
There is clearly a transaction
So not dormant for Co house purposes
Who is going to pay dividends to whom?
Just to reiterate.
HMRC dormant - no trading.
CoHo dormant - no transactions.
You can have transactions without trading.
Long time since An Anon posting was genuinely within site rules
Co not know why site Mods bother having site rules
Oh yes, just remembered
To slag off the regulars
Slag off the regulars on and offline.
Yet quietly shut this one down.
Not a word, not even privately to say dealt with, but there should be loud and clear on the post as they have done with the regulars.
Not only that, but this one was foul mouthed abusive on 2 separate occasions, days apart, yet his profile is still up.
https://www.accountingweb.co.uk/any-answers/rebate
Wonder exactly what you have to do to be banned, other than be a regular and be accused of not being very 'professional'.
Diy job if I ever saw one.
If holding company acquires IP, then that is not one of the specified exemptions that the company can be classed as dormant.
Regarding the articles, are you using the model articles? I'm sure you do not need to have the initial shares paid.
But it's probably sensible to anyway (notwithstanding the well-known clause in s424 ITEPA).
So you were happy to pay a solicitor for his knowledge, yet not an Accountant.
Why are Accountants seen as inferior in this set up ?
Remarkable
co cost £10 to do self
Solicitor then uses not the standard rules and therefore co has to be dealt with differently to other standard companies.
But they are so worth it, but accounts? just need a website and DIY
The IP was assigned at zero cost from the creators to the Holdco. I plan to license it at zero cost to the Opco to use.
Hm, but what's it worth? You might be right vis-à-vis the accounts, but be aware that tax can arise based on values as well as/instead of amounts paid. If it's worth £100, no-one's going to care; if it's £100,000, then really you ought to be taking advice. For future reference (if it's too late this time), the ideal time to take advice is while thinking and before doing. If it's too late this time for the ideal, it's still better late than never.
And by 'taking advice' I don't mean asking questions on Aweb.
WAS THERE ANY POINT IN IGNORING THE RULES AND THE SITE WARNING AND POSTING ANON?
Do not tell me
I am new and could not be bothered to read the rules
Standard Newbie excuse
I am new and could not be bothered to read the rules
Standard Newbie excuse
To be fair, I've been on here for twelve years and I still haven't read the site rules.
I am sure you would have been advised if you had broken them
How many times have you ignored the Anon site warning?
What is the point of Anon anyway? Most folk use fictional names on here and provide scant and/or fictional profile data.
Agree
But being able to read prior questions and answers means replies can be more focused
One person who was posting in plain then chose to go Anon for 2 questions last week and got annoyed when when I pointed out that she must be the 'client' because the question was so basic
Even PMd me to say she was AAT and a payroll manager.
What is the point of Anon anyway?
It's a fair question. I think if I found myself posting a question that genuinely merited use of Anon (i.e., per Sift, that included sensitive content) then I would also find myself wondering whether I should be posting it at all. (I hope I never have to put that hypothesis to the test!)
There is one exception. Mental health. There have been some very uplifting threads in which some very brave people have spoken about their struggles. These threads aren't for everyone, but help who they help. If it requires an anonymous post to get the ball rolling, so be it, in my view.
I can go with that
But Anon means no reply by Op to keep hidden
zero functional capability for the standard questions