WHAT IS A DORMANT COMPANY?

A dormant company is company that is registered with ASIC but is not carrying on any kind of business activity or receiving any form of income. Therefore, the ATO considers it dormant (or inactive) for corporation tax purposes. It can be dormant on the date of its incorporation, or it can become dormant after a period of activity.

There could be many reasons why a company may be dormant – to reserve a company name whilst preparing to launch the business, restructuring a previous active business, or an owner requires an extended period of time off, or any other reason.