A dormant company’s trial balance is short, but it still has to be right: it is the only thing the dormant accounts are built from. This article sets out the rules, the accounts to use, and a worked trial balance for each of the situations we see most often.
Each example is laid out like the Standard import template: a debit and a credit column for this year, and the same again for the prior year. Type the same figures into Manual Entry, or put them in a spreadsheet and import it. Amounts are in pounds.
The rules
- Balance sheet accounts only. A dormant company has no significant accounting transactions in the year, so there is nothing to enter under income, expenses or tax. Anything there raises a warning, and usually means the company was not dormant (see Not dormant after all).
- Debits equal credits, for this year and for the prior year.
- Enter the prior year, except in the company’s first period. For a company that has been dormant throughout it is usually the same as this year.
- Holding assets is fine; moving them is not. A company can be dormant with money in the bank, a loan outstanding or shares in another company, as long as nothing changed during the year.
- The two things Companies House ignores are fees and penalties paid to Companies House and money received for shares taken by the people who formed the company.
The accounts you will need
These are the common accounts dormant trial balances use. Imported names are matched to them automatically, so “Unpaid share capital”, “Retained earnings” or “Director’s loan account” from your own spreadsheet will land in the right place.
| Common account | Normal side | What it is for |
|---|---|---|
| Cash at bank | Debit | Money in the company’s bank account |
| Share capital not paid | Debit | Shares issued but not yet paid for (“called up share capital not paid”) |
| Amounts owed by directors | Debit | Money a director owes the company |
| Intercompany loans | Debit | Money owed to the company by its parent or another group company |
| Investment costs b/f | Debit | Shares in another company, at cost |
| Other debtors | Debit | Anything else owed to the company |
| Directors loan accounts | Credit | Money the company owes a director |
| Other Creditors | Credit | Anything else the company owes |
| Shares issued | Credit | Share capital issued during this period: use it in the first period |
| Share capital b/f | Credit | Share capital at the start of the period: use it from the second period on |
| Profit and loss reserves b/f | Credit (debit if losses) | Profits kept from earlier years, or losses not yet made good |
Shares issued and Share capital b/f both appear on the balance sheet as called up share capital. The difference only matters for the movement in the year.
Micro-entity or small company accounts
The same trial balance gives a different-looking balance sheet depending on the accounts type. Each scenario below shows both, so you can see where every line lands.
- Micro-entity (FRS 105) shows only the headings: fixed assets, current assets, creditors and a single capital and reserves figure. Unpaid share capital has a line of its own at the top.
- Small company (FRS 102 Section 1A) shows more detail: investments, debtors and cash separately, and capital and reserves split into called up share capital and the profit and loss account. Unpaid share capital and amounts owed by a parent are included in debtors.
Both carry the section 480 dormant company statement underneath. To switch between them, see Changing the accounts type.
A. New company, never traded, shares not paid for
The most common dormant company of all: formed with 100 £1 shares, and the subscribers have not paid for them yet. This is its first period, so there is no prior year.
| Common account | Debit | Credit | Prior Year Debit | Prior Year Credit |
|---|---|---|---|---|
| Share capital not paid | 100 | |||
| Shares issued | 100 | |||
| Total | 100 | 100 |
Because this is the first period, the prior year is excluded from the accounts, so they show a single year.
Micro-entity (FRS 105): called up share capital not paid of 100 on its own line, and capital and reserves of 100.
Small company (FRS 102 1A): the 100 is shown within debtors, and called up share capital of 100.
Also: tick Company has never traded as well as Dormant company in Company Information.
B. New company, shares paid into the bank
The same company, but the subscribers paid £100 into a new company bank account and nothing else has happened.
| Common account | Debit | Credit | Prior Year Debit | Prior Year Credit |
|---|---|---|---|---|
| Cash at bank | 100 | |||
| Shares issued | 100 | |||
| Total | 100 | 100 |
Micro-entity (FRS 105): current assets of 100 and capital and reserves of 100.
Small company (FRS 102 1A): cash at bank and in hand of 100 and called up share capital of 100.
Watch out: check the bank statements. A monthly account fee or a few pence of interest is a transaction, and the company is not dormant for the year. Many banks charge nothing on an account with no activity, but not all.
If the money for the shares was paid to a director and never reached the company, use Amounts owed by directors in place of Cash at bank. That is a loan to a director, which has to be disclosed and may have Corporation Tax consequences, so it is usually simpler to treat the shares as unpaid (scenario A) until the money arrives.
C. The second and later dormant years
The company in scenario B is still dormant a year later. The share capital is now brought forward, and last year’s figures go in the prior year columns.
| Common account | Debit | Credit | Prior Year Debit | Prior Year Credit |
|---|---|---|---|---|
| Cash at bank | 100 | 100 | ||
| Share capital b/f | 100 | 100 | ||
| Total | 100 | 100 | 100 | 100 |
The accounts now show both years side by side.
If last year’s period is in Tax Optimiser, Pull in Prior Year Figures fills the prior year columns for you. The prior year share capital may then sit on Shares issued rather than Share capital b/f. That is fine: both show as called up share capital.
The trial balance for each following dormant year is the same.
D. Used to trade, now dormant all year
Example Stillwater Ltd stopped trading in 2023. Throughout the year to 31 December 2024 it did nothing: the money it had left stayed in the bank, and the retained profit stayed in reserves.
| Common account | Debit | Credit | Prior Year Debit | Prior Year Credit |
|---|---|---|---|---|
| Cash at bank | 1,250 | 1,250 | ||
| Share capital b/f | 100 | 100 | ||
| Profit and loss reserves b/f | 1,150 | 1,150 | ||
| Total | 1,250 | 1,250 | 1,250 | 1,250 |
Every balance is frozen at the figure the company stopped with, so this year and the prior year are identical.
Micro-entity (FRS 105): current assets and capital and reserves of 1,250.
Small company (FRS 102 1A): cash of 1,250, called up share capital of 100 and a profit and loss account of 1,150.
If the company was still trading in the prior year, the prior year columns are that year’s full trial balance, income and expenses included; pull them from last year’s period. Only this year has to be free of profit and loss entries. The company must have been dormant from the first day of this year: one that stopped part-way through this year files normal accounts for this year and dormant accounts from the next.
E. Dormant with a director’s loan and losses
A company stopped trading owing its director £2,400, with losses of £2,500 that were never made good, and no money left. Nothing has been repaid since.
| Common account | Debit | Credit | Prior Year Debit | Prior Year Credit |
|---|---|---|---|---|
| Profit and loss reserves b/f | 2,500 | 2,500 | ||
| Directors loan accounts | 2,400 | 2,400 | ||
| Share capital b/f | 100 | 100 | ||
| Total | 2,500 | 2,500 | 2,500 | 2,500 |
The balance sheet shows net liabilities of 2,400. A company with net liabilities can still be dormant.
Micro-entity (FRS 105): creditors of 2,400 and capital and reserves of minus 2,400.
Small company (FRS 102 1A): the same creditors, with called up share capital of 100 and a profit and loss account of minus 2,500.
Watch out: the loan has to stay exactly where it was. If the director paid any of the company’s bills during the year, other than Companies House fees, or wrote off part of the loan, that is a transaction and the company was not dormant. Where the director is owed money the loan is under Directors loan accounts; where the director owes the company, use Amounts owed by directors instead.
F. Dormant subsidiary
A subsidiary formed with one £1 share. The parent paid for the share but the money was never moved into a bank account in the subsidiary’s name; it is owed by the parent.
| Common account | Debit | Credit | Prior Year Debit | Prior Year Credit |
|---|---|---|---|---|
| Intercompany loans | 1 | 1 | ||
| Share capital b/f | 1 | 1 | ||
| Total | 1 | 1 | 1 | 1 |
Micro-entity (FRS 105): current assets of 1 and capital and reserves of 1.
Small company (FRS 102 1A): debtors of 1 and called up share capital of 1.
If the parent has not paid for the share, use Share capital not paid instead, as in scenario A.
Watch out: costs the parent pays and never recharges, such as the accountancy fee, belong in the parent’s books, not the subsidiary’s. If the parent recharges them, the subsidiary has an expense and is not dormant.
G. Dormant company holding an investment
A company that holds shares in another company, bought some years ago with a loan from its director, and received no dividends or other income this year.
| Common account | Debit | Credit | Prior Year Debit | Prior Year Credit |
|---|---|---|---|---|
| Investment costs b/f | 5,000 | 5,000 | ||
| Directors loan accounts | 4,900 | 4,900 | ||
| Share capital b/f | 100 | 100 | ||
| Total | 5,000 | 5,000 | 5,000 | 5,000 |
Micro-entity (FRS 105): fixed assets of 5,000, creditors of 4,900 and capital and reserves of 100.
Small company (FRS 102 1A): the fixed assets are shown as investments.
Watch out: a dividend received, a sale of the shares, or a write-down in value is a transaction. In those years the company files normal accounts. HMRC may also regard a company that manages investments as active for Corporation Tax even when it is dormant for Companies House; see Corporation Tax for a dormant company.
H. The director paid a Companies House fee
The company in scenario C has no money of its own, so its director paid a £50 Companies House fee personally. Fees and penalties paid to Companies House do not stop a company being dormant, so there are two acceptable ways to deal with it.
Leave it out of the company’s books
If the director does not expect to be repaid, the company has no transaction at all. Enter the trial balance exactly as in scenario C.
Record it, and override the warning
If the director wants it recorded as money the company owes them:
| Common account | Debit | Credit | Prior Year Debit | Prior Year Credit |
|---|---|---|---|---|
| Cash at bank | 100 | 100 | ||
| General expenses | 50 | |||
| Directors loan accounts | 50 | |||
| Share capital b/f | 100 | 100 | ||
| Total | 150 | 150 | 100 | 100 |
The expense is in profit and loss, so the Validation panel in Accounts shows “This period is marked dormant but the profit and loss account has £50 of income, expenses or tax”. Because the entry is only a Companies House fee, choose Override.
There is still no profit and loss account in dormant accounts; the fee shows up as a creditor of 50 and a lower reserve.
Micro-entity (FRS 105): net assets and capital and reserves fall to 50.
Small company (FRS 102 1A): called up share capital stays at 100 and the profit and loss account is minus 50.
Next year, the 50 is part of Profit and loss reserves b/f (as a debit) and the Directors loan accounts balance carries on unchanged.
Not dormant after all
If any of these happened during the year, the company was not dormant for that year. Untick Dormant company and file micro-entity or small company accounts with a full trial balance.
| What happened | Why it counts |
|---|---|
| Bank interest received, however small | Income |
| Bank charges or an account fee | An expense paid by the company |
| An accountant’s or other professional fee charged to the company | An expense, even if a director paid it on the company’s behalf |
| A dividend paid or received | A transaction, even though dividends paid are not in profit and loss |
| A loan repaid, advanced or written off | A movement on the balance sheet |
| An asset sold, bought or written down | A movement on the balance sheet |
Some of these, such as a dividend or a loan repayment, do not touch profit and loss, so no warning appears. Compare this year with the prior year: in a dormant year every balance sheet figure should be unchanged, apart from Companies House fees.
Checking it
- If the trial balance does not balance, an alert shows the difference. Show detailed breakdown compares the assets and liabilities with the capital and reserves. The usual cause in a dormant company is a reserve left out, or the share capital entered on the wrong side.
- Open Accounts and check Validation for the dormant warnings. See Validation and signing.
- Open Statement of financial position. It should show this year and last year, and the section 480 dormant company statement. Filing dormant accounts step by step shows what it looks like and goes on to the filing.
Frequently asked questions
Should I use Shares issued or Share capital b/f?
Shares issued in the period the shares were issued, normally the first period. Share capital b/f in every period after that. Both show as called up share capital on the balance sheet, so the balance sheet is right either way.
Can the profit and loss reserve be negative in dormant accounts?
Yes. Enter accumulated losses as a debit on Profit and loss reserves b/f. The balance sheet then shows a negative reserve, and net liabilities if the losses exceed the share capital.
Do I have to enter the prior year?
Yes, unless it is the company’s first period. The accounts show both years side by side.
The company’s bank account was closed. What do I enter?
Nothing for Cash at bank. If the balance was paid out when the account closed, that happened in the year it closed, and that year was not dormant. Where did the money go? Usually to a director, which leaves Amounts owed by directors or reduces Directors loan accounts.
Where does unpaid share capital appear in the accounts?
In micro-entity (FRS 105) accounts, as “called up share capital not paid” on the first line of the balance sheet. In small company (FRS 102 Section 1A) accounts, within debtors. Scenario A shows both.
Which accounts type should a dormant company use?
Either, if the company qualifies. Most dormant companies use micro-entity accounts because they show the least. The trial balance is the same whichever you choose.
Can I import a dormant trial balance instead of typing it?
Yes. Use the Standard template from Import a trial balance from a spreadsheet, with one row per line of the tables above.
