• a22162

Exemption from Audit Requirements for Dormant Company



A company is dormant during a period in which no accounting transaction occurs; and the company ceases to be dormant on the occurrence of such a transaction. There shall be disregarded transactions of a company arising from any of the following:

(a) the taking of shares in the company by a subscriber to the constitution in pursuance of an undertaking of his in the constitution;

(b) the appointment of a secretary of the company;

(c) the appointment of an auditor;

(d) the maintenance of a registered office;

(e) the keeping of registers and books;

(f) the payment of any fee or charge (including any fee, penalty or interest for late payment);

(g) the payment of any composition amount.

Where a company is, at the end of a financial year, exempt from audit requirements —

(a) the copies of the financial statements or consolidated financial statements and balance-sheet of the company need not be audited;

(b) copies of an auditor’s report need not be laid before the company in a general meeting; and

(c) the annual return of the company to be lodged with the Registrar shall be accompanied by a statement by the directors that no notice has been received from any member or members in relation to that financial year.

Where a company which is exempt from audit requirements ceases to be dormant, it shall cease to be so exempt; but it shall remain so exempt in relation to accounts for the financial year in which it was dormant throughout.

Any member or members holding not less than 5% of the total number of issued shares of the company (excluding treasury shares) or any class of those shares (excluding treasury shares), or not less than 5% of the total number of members of the company (excluding the company itself if it is registered as a member) may, by notice in writing to the company during a financial year but not later than one month before the end of that year, require the company to obtain an audit of its accounts for that year.

Where a notice is given, the company is not entitled to the exemption in respect of the financial year to which the notice relates.

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