The definition of an active company varies between Companies House and HMRC. You may encounter this term in various statutory guidelines while managing your limited company, so it’s important to understand the different meanings in these contexts.

Active at Companies House

When a new company is incorporated at Companies House, it is immediately considered ‘active’ as it comes into existence as a separate legal entity and is ready to start trading at the owner’s earliest convenience.

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For Companies House, a registered company that is not trading is deemed dormant for the purpose of submitting annual accounts.

As a result, a company can be classified as both ‘active’ (due to its incorporation) and ‘dormant’ (because it is not trading) simultaneously.

Active at HMRC

HMRC defines a company as ‘active’ if it is incorporated at Companies House and is involved in business activities or receiving income. In these cases, the company is considered active for Corporation Tax purposes, which means it must:

• Register with HMRC for Corporation Tax.
• Submit a Company Tax Return and full statutory accounts to HMRC annually.
• Pay Corporation Tax on all taxable income received each year.

Active company requirements for Companies House

Companies House requires all active companies to file annual confirmation statements and annual accounts every year, even if they are not trading (i.e., dormant).

The confirmation statement (Companies House form CS01) confirms a company’s registered details as of a specific date. This ensures that Companies House maintains accurate information on the public register. The information included in the statement may comprise:

• Registered company name
• Registered office address
• SAIL address (single alternative inspection location)
• Directors’ details
• Company secretary details
• Shareholders’ details (or guarantors’ details if the company is limited by guarantee)
• Share capital
• Standard Industrial Classification (SIC) code(s)
• Location of statutory records and registers
• People with significant control (PSCs)

Annual accounts report the financial activity of a limited company for its most recent financial year. All registered companies must file accounts at Companies House annually.

Small companies and micro-entities often prepare abridged (simpler) accounts, while other limited companies that are trading must prepare full statutory accounts.

Inactive companies (dormant/not trading) for Corporation Tax purposes, as well as those deemed dormant by Companies House, should file dormant accounts instead of statutory accounts.

Active company requirements for HMRC

A company that is active for Corporation Tax must register with HMRC online within three months of starting any of the following taxable activities:

• Buying or selling goods
• Buying or selling services
• Managing investments
• Issuing or receiving dividends from shares
• Employing staff and operating payroll (including paying a director’s salary)
• Leasing or purchasing property or land
• Earning interest
• Spending or receiving money through a business bank account

After registering for Corporation Tax, HMRC will provide deadlines for paying Corporation Tax and filing a Company Tax Return and annual accounts. You may also need or want to register for VAT.

If your company is not trading and is not active for Corporation Tax, you should notify HMRC’s Corporation Tax office as soon as possible to report its inactive status. Until the company becomes active for Corporation Tax, you will not need to prepare tax returns or accounts for HMRC.