Balance sheet for a dormant company

Can someone please tell me under what circumstances the following balance sheet can be made out for a Dormant Company? It is taken from a Companies House template (Dormant Company Accounts).
Note:
Net Assets need to equal Total Shareholders Fund, (Issued Share Capital).
If a dormant company has to have no transactions then Net Assets have to be nothing other than 0.
Consequently Issued Share capital has to be nothing other than 0.
Can there be a situation where Net Assets are more than 0?
Can you fill in the last part correctly?
Thanks. ------ Authorised Share Capital: (Number ____ Share____ Type____ value: ____
Called Up Share Capital Not Paid: ........____
Current Assets: (In bank & in hand): .....____
Net Assets: ...................................................................____
Issued Share Capital (Total Shareholders Funds): (Number ____Share____Type____ Value: _____)......____
During the year, the company allotted ____ ordinary shares
with an aggregate nominal value of ____
the consideration received by the company was ____
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It's not a balance sheet that makes a company dormant. It's the transactions that determine whether it is dormant or not.

Why do you say issued share capital? There could be a share premium.

be

A dormant company doesn't have to have no transactions. I posted the Companies House link that explains what is required for a company to be dormant.

Total rubbish.

Yes

Yes, if I know what the transactions are.

_
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wrote:

It's not a balance sheet that makes a company dormant. It's the transactions that determine whether it is dormant or not.

Why do you say issued share capital? There could be a share premium.

A dormant company doesn't have to have no transactions. I posted the Companies House link that explains what is required for a company to be dormant.

Total rubbish.

Yes

Yes, if I know what the transactions are.
-------
It's a private limited company.
What transactions then make a company dormant or not? Explain in more detail by examples or whatever.
In "my mind eye" I went to the bank ostensibly to put 10 in representing payment for the issued shares. That's just in "my minds eye"! In fact, it was required by the bank that I put in 50 to start the account. That 50 does *not need* to represent shares payment at all. I (or the Company) have not issued any share certificates. But there is 50 in the bank.
I'd really like to know how you can have other than zero on the assets side in a dormant company. Teaching moment here.
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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

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writes

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?
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I said:

Actually I do only have two options regarding the balance sheet.
In addition, I may have the option of terminating my bank account, so there is no bank balance and starting one up again at a later date. Unless Companies House objects.
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writes

For the sake of correctness: Dormant Company Accounts *cannot* have a balance of 0.
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.
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What does "balance" mean?

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The shares have to be called up.
You can have a balance sheet with shares not paid for.
Where do you get all this from? You seem to be making it up.
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writes

What does "balance" mean?

The shares have to be called up.
You can have a balance sheet 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
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writes

I've been taking a company's register of members as same as the list of subscribers at back of Memorandum of Association. That may be the error I'm making?
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writes

No, I don't think I'm making an error.
*In my case*, if I were to make a register of members, there would only be one, the same as what is an the list at the back of the Memorandum of Association. So list of subscribers = register of members. Therfore for all practical purposes Issed Share capital is as per list of subscribers in the Memorandum.
Therfore, *in my case* DCA balance cannot be anything other than 10.
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What do you mean by DCA balance? There is no such concept.
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What do you mean by DCA balance? There is no such concept.
--

It's probably something concocted up by Companies House, "Dormant Company
Accounts".
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You are thinking of a Dormant Company Account balance sheet.

I know all about Dormant Company Accounts.

You said Dormant Company Accounts balance was £10. There is no such concept. Individual items in the balance sheet have amounts but what you are saying is just nonsense.

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Balance sheets always balance if done correctly.

£10.
There's no such thing as a "balancing figure". All amounts can be justified independently.

You are still not understanding the concept of dormant company accounts.
The company could have traded for years, have share premium accounts, revenue reserves, etc. Then in one particular period the company is dormant and dormant company accounts can be prepared. Companies House don't recommend using the DCA template though.
Can you answer the following questions?
Why have you formed a company?
Why have you opened a bank account?
Why don't you have an accountant?
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You are thinking of a Dormant Company Account balance sheet.

I know all about Dormant Company Accounts.

You said Dormant Company Accounts balance was 10. There is no such concept. Individual items in the balance sheet have amounts but what you are saying is just nonsense.

Balance sheets always balance if done correctly.

There's no such thing as a "balancing figure". All amounts can be justified independently.

You are still not understanding the concept of dormant company accounts.
The company could have traded for years, have share premium accounts, revenue reserves, etc. Then in one particular period the company is dormant and dormant company accounts can be prepared. Companies House don't recommend using the DCA template though.
-
Precisely. But we are actually specifically talking of a hypothetical situation, where a company has never traded. In this defined situation, where the only transaction may have been selling of shares (so no premium on shares), using the DCA format, the balance sheet cannot be made to balance at 0, it has to be at the Issued Share Capital figure. That's all I'm saying and that this is true no matter whether shares were called up or not or whether there is money in the bank or not.
Look at the DCA format above and you will see that. Item c) is not possible! Because: "Shares are "issued" when a person is registered as a member in the company's register of members." (GBA6). And I believe members who are subscribers to the Memorandum are on that register, even if other possible members are not.
--
Can you answer the following questions?

Why have you opened a bank account?
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DCA Form of Accounts
Authorised Share Capital: Number: 10 ShareType:Ord Value: 10
Called Up Share Capital Not Paid: ........
Current Assets: (In bank & in hand): .....
Net Assets: ......................................................____
Issued Share Capital (Total Shareholders Funds): Number: ____ Share Type: Ord Value:____
Issued Share Capital ....................____
During the year, the company allotted ____ ordinary shares
with an aggregate nominal value of ____
the consideration received by the company was ____
---------
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."
--

Net Assets should balance with Issued Share Capital.

In the hypothetical situation of a company never having traded since
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When you say "balance" do you mean Net Assets and Issued Share Capital?
If Share Capital is the only shareholders funds then obviously the Issued Share Capital cannot be £0.
If you look at the latest form for dormant companies it only allows subscriber shares. So there's no share premium or directors loan.
http://www.companieshouse.gov.uk/forms/generalForms/AA02interim.pdf
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wrote:

When you say "balance" do you mean Net Assets and Issued Share Capital?
If Share Capital is the only shareholders funds then obviously the Issued Share Capital cannot be 0.
If you look at the latest form for dormant companies it only allows subscriber shares. So there's no share premium or directors loan.
http://www.companieshouse.gov.uk/forms/generalForms/AA02interim.pdf
--

I mean the figure in either Net Assets or Issed Share Capital, which will be
the same at a balance. It cannot be 0.
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I agree that it shouldn't allow £0 but the error check simply checks the additions I think.
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What is item c)?

It isn't.

An accountant would have told you not to open a bank account and how to complete the accounts.

No
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