Companies Act 2014 section 365

Dormant company audit exemption

Section 365 provides a special audit exemption for dormant companies, allowing qualifying companies that have had no significant activity during a financial year to dispense with the requirement for a statutory audit.

• A company is dormant if it has no significant accounting transactions during the year and its assets and liabilities consist only of investments in shares of, and amounts due to or from, other group undertakings
• Directors must formally decide to avail of the exemption and record that decision in the minutes of the relevant board meeting
• Certain transactions are disregarded when assessing dormancy, including subscriber shares taken on formation and fees paid to the Registrar for name changes, re-registration, or filing annual returns
• Where the exemption applies, the company must include a statement on its balance sheet confirming it is availing of the dormant company audit exemption under Chapter 16 of Part 6 of the Companies Act 2014