Placing a company into dormancy
Discussion
I'm considering placing a company into a period of dormancy - between 18 months and 2 years.
The reason is somewhat convoluted but is linked to the requirement to preserve the company's credentials which are its primary assets in the eyes of our market. If I shut the company down and set up again later, we cannot transfer the credentials even though it was me that was responsible for them.
I understand the mechanics but would be interested to know of any practical issues that may crop up from those who have done this.
The reason is somewhat convoluted but is linked to the requirement to preserve the company's credentials which are its primary assets in the eyes of our market. If I shut the company down and set up again later, we cannot transfer the credentials even though it was me that was responsible for them.
I understand the mechanics but would be interested to know of any practical issues that may crop up from those who have done this.
Ean218 said:
What do you mean by credentials? If you mean accounts/trading history then going dormant effectively snuffs that out anyway.
It's a bit of an odd one. Our biggest sector is the international financing / donor financing sector - World Bank, UN, EU and the like. Credentials are the list of projects we've delivered. When tendering, these both influence the passing of pre-tender compliance and also score very high proportions on the total tender scores. These can be transferred to a different company in the case of acquisition or merger but if the company holding them goes bust or is wound down then those credentials can no longer be applied. Because dormancy doesn't technically close the business, the credentials can be carried over once the company is taken out of dormancy.It is a bit of a pain and does seem to be a quirk of our sector but rules is rules. We either play the game or we don't.
The reason for all this arising is that my business partner is retiring which has coincided with the decimation of our UK market to the point where the company is currently, just me working on international stuff (mainly). We know the UK market will come back but this will take two years and a couple of very nice projects have cropped up but they can only be done on a freelance basis and will take all of my time.
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