What causes an LTD to lose its dormant status for HMRC

There are some complex matters to consider regarding an LTD staying dormant. Sorry if there are many questions. That is to cover all possible scenarios and be sure to always be on the safe side. I have registered an LTD and will probably use it exclusively to protect my IP, and therefore will stay dormant. Would any of the following actions cause my dormant LTD to lose its dormant status for the HMRC? 1. Creating online accounts on websites or registering to services using the LTD's name rather than my name+surname (e.g. currently I am registered to the Federation of Small Businesses as self-employed; should I end my self-employment business, I would probably need to use my dormant LTD name instead) 2. My LTD has the same name as a service it provides. With a dormant LTD named XYZ LTD, can I still advertise an educational method named XYZ (or XYZ Coaching) if I put "my name and surname trading as XYZ" in the footer of my website and any income goes into my own bank account that doesn't belong to the LTD? Or, does that cause the LTD to lose dormant status anyway? And if that doesn't cause the dormant status to be lost, should I put the same text ("my name and surname trading as XYZ") in my own and the LTD's social media profiles? If so, where? BTW, any post would feature a link to that same website. Also, am I allowed to name my social media pages in one or more of these ways without that causing the LTD to lose its dormant status? a. XYZ b. XYZ coaching. 3. Writing a business plan or negotiating contracts. 4. A collaboration with the students of a university. Under this programme the students would work at improving the delivery of my service, i.e. things like creating promotional videos, preparing a marketing plan, improving the tech. All these works will be made for free (and if and when any compensation for materials or external consultation is required, I would pay them through my personal bank account). Also, consider that the LTD name will be registered in the collaboration programme. 5. A lawyer prepares work contracts and makes the business GDPR compliant (to prepare for advertising), and again, I would pay for these services through my own bank account, not that of the company. 6. This last one is rather complex (I hope you will help with this too). "XYZ" is the name of an educational method that I might decide to provide as a free service. In return for my service, anyone who wants to will donate freely and without a set minimum amount of money into my personal bank account. Those who cannot donate will receive the service for free. I am currently self-employed, but will soon close my position at HMRC. I will have a site XYZ.com (the words 'XYZ LTD' will not appear on the site, only 'XYZ' which is the name of the teaching method). People visiting the site from the UK or other countries will not see a shop, only 'make a free donation' or 'ask a sponsor to donate for you'. What can I write in the footer? (I certainly won't write "XYZ LTD" and perhaps not even "my name and surname trading as XYZ" because I will no longer be self-employed at that point. Can you confirm for sure that this will not cause my LTD to lose its "dormant" status for HMRC, given also the fact that I will not be opening a current account for it? But what if one day I decide to provide the service for a fee to other non-UK countries? If one or more of the above actions cause the LTD to lose its dormant status, would it get either the "trading" or "non-trading" status in each of the above cases? Could you, please, specify which leads to what status?

Hi Guido,

Using the Ltd company’s name in any of the situations mentioned in your query will not by itself mean that the company is no longer dormant.  
For corporation tax purposes the Ltd company will not be dormant if it receives:  
•    Income from its trading activities including those mentioned in your query. 
•    Income from any other source for example rental income.
•    Proceeds from the sales of any assets.
The company will also not be dormant if it holds any assets capable of generating any income, profits, or chargeable gains. So, as soon as the company acquires or creates any IP, as mentioned in your query, it will not be dormant. This is because IP can generate income or chargeable gains on disposal. You should seek professional advice for further details on this aspect if required. 
If the company receives any income from its activities including any donations, then it will no longer be dormant. This is the position even if the income is received from overseas. If the income is generated by the company, it will subject to corporation tax even if the income is deposited to your personal account and the company will not be dormant. You should then contact HMRC straightaway so that the company’s record can be updated for tax return filing purposes. 
As to what constitutes trading, I would refer you to the ample guidance in HMRC’s Business Income Manual at BIM20000  onwards and in particular to BIM20105 for further information.
As for non-trading this simply means income from sources other than trading, for example rental income and bank or building society interest as well as profit on the sale of assets. 

Thank you.

Many thanks for taking the time to go through this complex topic. Re IP, my educational method is not patentable and it is not trademarked yet. I am the inventor of this method. My LTD is just using the same name to prevent others to create one with my method's name. The method has been out there since 2011 and I have used it overseas since then, while my LTD was only incorporated in 2021. Also,  - As a self-employed, in the UK I have earned only a few tens of pounds every year from it - I have not licensed anybody yet to use it (neither in the UK nor overseas). Would that still cause my LTD to lose its dormant status? What if I trademark the method in the UK? What if I trademark it in countries other than the UK? Please, if any of those aspects go beyond HMRC's competence, please, let me know who I should ask. Accountants seems not to be prepared regarding this matter, nor IP experts should (as this regards IP+tax matters)... Re donations, would my LTD still lose its dormant status if donations go to support the use of my IP in another country? I am talking about the fact I might open an overseas company which I can use to provides my service (my method) and I might open a bank account for my overseas business soon to take donations or being paid when I provide my service.

In other words, I am trying to understand whether the fact that the name of the LTD is the same as the service it provides would create confusion if and when my overseas company/sole trader position provides that same service: a. in a non-UK country b. in the UK.

Re IP, perhaps I have used the term "IP" improperly. Sorry if so. To clarify, my LTD will not provide any service. It only has the same name of my method. Therefore, I suppose it can stay dormant.

Hi,

If there is no income going through the company it can still be retained or set up, if not already done, to protect the name, and dormancy would be retained. There would be no need to file annual returns for Corporation Tax but annual submissons would still be needed by Companies House and you will need to refer to them regarding this.

You would be expected to inform Corporation Tax within 3 months of any trading occuring so that we can update the records.

If donations or any income go through the company then dormancy could be affected but specifics would be needed to establish the correct position.

With regards to sole trader, company name, there is no difference and the same name can be used. outside of the UK you would need to check that countries companies register to ensure no other company is using that name.

With regards to the company name being the same as the service provided, again as long as there is not another company already using that name it will be fine.

You can see information on company residence here:

INTM120200 - Company residence: Statement of Practice 1/90

As previously stated we would strongly suggest you speak to an accountant.

Thank you.

We have a Property Management Company (a so called Residential management company run by resident directors, non-profit) which is Dormant. We have earned a small amount of interest on a bank account and were wondering how much interest could we earn before we might lose our Dormant status. To be clear, we have no other Income (other than the Service charges we receive in trust to cover the expenditures).

Hi 
HMRC permits a Residential Management Company to retain dormancy status where the annual Corporation Tax liability is not expected to exceed £100.
Thank you.