Defination of Dormant company by ACRA
ACRA defines a company as dormant during a period in which no accounting transaction occurs.
Transactions that will not affect the dormant status of the company:
- The appointment of a secretary of a company;
- The appointment of an auditor;
- The maintenance of a registered office;
- The keeping of registers and books;
- The payment of fees to the Registrar or an amount of any fine or default penalty paid to ACRA; and
- The taking of shares in the company by a subscriber to the constitution in pursuance of an undertaking in the constitution.
Qualified dormant is exempt from requirement to prepare financial statements
A dormant non-listed company (other than a subsidiary of a listed company) is exempt from requirement to prepare financial statements, if:
(a) the company fulfils the substantial assets test; and
(b) the company has been dormant from the time of formation or since the end of the previous financial year.
The substantial assets test is that the total assets of the company at any time within the financial year must not exceed $500,000. For a parent company, the consolidated total assets of group at any time within the financial year must not exceed $500,000.
Dormant listed companies and their subsidiaries, and dormant unlisted companies which do not fulfil the substantial asset test must prepare financial statements but are exempt from audit.