This article is for Irish company directors who have a registered company that's not currently trading and want to understand their options and obligations.
If you're wondering whether you can pause your company without closing it down, what transactions are allowed while dormant, and what filing requirements you still need to meet, this guide covers the dormancy rules, how to maintain compliance, and how to avoid costly mistakes like losing your audit exemption.
Key Takeaways
• A dormant company saves €2,000-4,000 annually by skipping audits but must still file annual returns on time.
• Only six transaction types are allowed: share payments, CRO fees, penalties, registered office fees, and company secretary fees.
• Any other transaction—including bank charges, salaries, or subscriptions—immediately breaks dormancy for the entire financial year.
• You must file your annual return within 56 days or lose audit exemption for two years.
• Dormancy happens automatically when you meet the criteria; no application or notification to CRO is required.
Can I pay myself a salary while my company is dormant?
No, paying yourself a salary or director's fees breaks dormancy status. The only payments allowed are shares at formation, CRO fees and penalties, annual return fees, registered office fees, and company secretary fees. Any other transaction, including paying yourself, means your company is not dormant for that entire financial year.
Do I still need to file annual returns if my company is dormant?
Yes, you must file your annual return every year exactly on time, even when dormant. You have 56 days from your annual return date to file, and missing this deadline costs you a €100 fine plus €3 daily penalties. Worse, late filing means you lose audit exemption for the next two years, potentially costing you €4,000.
How much money will I save by making my company dormant?
The main saving is skipping the audit requirement, which typically saves €2,000-4,000 per year. This exemption is automatic for dormant companies - you don't need to apply for it. The savings add up significantly if you remain dormant for multiple years.
Will bank charges on my company account break dormancy?
Yes, bank charges are accounting transactions that break dormancy status. If your company bank account incurs monthly fees, those transactions mean you're not dormant for that financial year. Consider closing the account if you're planning to go dormant to avoid this issue.
Can I keep my company dormant to protect my company name?
Yes, keeping your company dormant is a legitimate way to protect your company name. Once you strike off a company, someone else can register that name, but going dormant lets you keep it while not actively trading. This is useful if you're planning to trade later or are between projects.
What happens if I receive even a small payment while dormant?
Even one transaction outside the allowed list breaks dormancy for the entire financial year. A €20 subscription payment, insurance payment, or any income received means you're not dormant and will need full financial statements and potentially an audit. The rules are strict - you either have zero non-permitted transactions or you're not dormant.
Do I need to notify the CRO when my company becomes dormant or starts trading again?
No, there's no formal application process or special form to file. Your company becomes dormant automatically when it meets the definition (no significant accounting transactions), and dormancy ends automatically the moment you make any significant transaction. You simply file the appropriate financial statements based on your actual activity.
What must I still maintain even when my company is dormant?
You must continue to maintain a company secretary (who can't be your sole director), a registered office address in Ireland, and statutory registers of directors, members, and secretaries. You also need at least one EEA-resident director, or maintain your Section 137 Bond if you don't have one. These requirements don't disappear during dormancy.
