A dormant company can have a bank account, but the bank must know the account is dormant and approve it
A dormant company — one that has filed dormancy status with Companies House but has not ceased to exist — can hold a bank account. However, most banks will not open a new account for a dormant company, and some will freeze or close an existing account if they discover the company is dormant and the account shows no activity for an extended period.
The key issue is that banks treat dormancy as a risk signal. A dormant company by definition has no trading activity, no employees, and no regular income. Banks see this as a red flag for money laundering or account misuse. If you want to keep a bank account while dormant, or open one before going dormant, you need to tell the bank explicitly and get written confirmation they will allow it.
If you are reactivating a dormant company and need to restore banking access, the process depends on whether the account still exists, whether the bank froze it, and whether you can prove the company's current legitimacy to the bank's satisfaction.
Key Takeaways
- Banks can close dormant company accounts without warning if they detect no activity for 12 months or more, so dormancy alone does not protect an account.
- If you plan to keep an account while dormant, contact your bank in writing before filing dormancy status and ask them to confirm in writing they will maintain the account.
- Most banks will refuse to open a new account for a company already registered as dormant at Companies House.
- When reactivating a dormant company, you may need to provide the bank with updated director details, proof of reactivation, and an explanation of the company's future activity before they will restore access.
- Some banks have specific dormant company account products, but these are rare and usually only available to companies that were customers before going dormant.
Why banks close dormant company accounts
Banks have legal obligations under anti-money laundering (AML) rules to monitor accounts for suspicious activity — or in this case, for the complete absence of activity. An account that shows no transactions for 12 months or longer signals to the bank's compliance team that the account may be abandoned, dormant, or being used for illicit purposes.
When a bank detects dormancy, they typically send a letter asking the account holder to confirm the account is still in use and explain its purpose. If you do not respond, or if the account remains inactive after the letter, the bank can freeze it or close it entirely. This is not a breach of contract on the bank's part — most business account terms allow the bank to close an account with notice if it appears abandoned or poses a compliance risk.
The problem is compounded if the company is registered as dormant at Companies House. The bank can search the Companies House register and see that the company has filed dormancy accounts, which means no trading activity. This makes closure more likely, not less.
Opening a bank account for a dormant company
Most high street and online banks will not open a new business account if the company is already registered as dormant at Companies House. When you apply for a business account, the bank runs checks including a Companies House search. If that search shows dormancy status, the bank's automated system or compliance team will reject the application.
Some banks have exceptions for companies that are dormant but expect to reactivate soon. You would need to contact the bank directly — not through their online application — and explain that the company is dormant but will resume trading within a specific timeframe. You would also need to provide a business plan or letter explaining the intended activity. Even then, approval is not may provide.
A smaller number of banks, particularly those focused on business lending or accounting software integrations, offer accounts specifically for dormant companies. These are usually only available to companies that were customers before going dormant, or to companies that can demonstrate they are in a temporary dormancy period before reactivation. You would need to contact banks directly to ask whether they offer this product.
Keeping an account active while dormant
If you have an existing bank account and plan to file dormancy status, the safest approach is to notify the bank in writing before you file. Write to the bank's business account management team — not the general customer service line — and state that the company will be filing dormancy status with Companies House but will maintain the bank account. Ask them to confirm in writing that they will not freeze or close the account as a result.
Keep this written confirmation. If the bank later sends a letter asking about account activity, you can refer back to your earlier notification and their response. This does not may provide the bank will never close the account, but it creates a record that you informed them of the dormancy status and they accepted it.
Some companies maintain a small amount of activity in a dormant account — for example, a standing order to pay accountancy fees, or a quarterly transfer to another account — to signal to the bank that the account is not abandoned. This is not required by law, but it can reduce the risk of the bank closing the account due to inactivity.
Reopening a bank account after reactivation
If your dormant company's bank account was frozen or closed, you will need to contact the bank to restore access. The bank will ask for proof that the company has been reactivated. This usually means providing a copy of the latest accounts filed at Companies House showing the company is no longer dormant, or a letter from your accountant confirming reactivation.
The bank may also ask for updated information about the company's directors, shareholders, and intended business activity. If there have been changes to the company's ownership or structure since it went dormant, the bank will want to know. They may also ask for a business plan or explanation of how the company will generate income going forward.
If the account was closed rather than frozen, you may not be able to reopen it with the same bank. In that case, you will need to open a new account. Once the company is no longer registered as dormant at Companies House, most banks will accept a new application. The process is the same as opening any new business account: you will need to provide proof of identity for the directors, proof of the company's address, and details of the company's business activity.
What documents you need to show the bank
| Situation | Documents to provide |
|---|---|
| Notifying the bank before going dormant | Letter stating dormancy filing date and confirmation that the account will remain active; copy of dormancy accounts filed at Companies House |
| Reopening a frozen account after reactivation | Proof of reactivation (latest accounts or accountant letter); updated director details if changed; business plan or explanation of future activity |
| Opening a new account after reactivation | Proof of identity for all directors; proof of company address; Companies House certificate showing company is active; details of business activity |
| Requesting a dormant company account product | Proof of dormancy status; explanation of why account is needed; timeframe for reactivation if applicable |
What to do if your dormant account was closed without notice
If your bank closed the account without sending a warning letter first, contact the bank's complaints team immediately. Ask for a written explanation of why the account was closed and when the decision was made. Most banks are required to give notice before closing an account, usually 30 days, so if they did not, you may have grounds to complain.
If the account held funds when it was closed, the bank must return those funds to you. Ask the bank how they will do this — they may send a cheque, transfer to another account, or require you to collect the money in person. If the account was overdrawn, the bank may attempt to recover the debt, though this is less common with dormant accounts.
If you believe the bank acted unfairly, you can escalate the complaint to the Financial Ombudsman Service (FOS). The FOS can order the bank to pay compensation if they closed the account in breach of the terms or without proper notice. However, the FOS will also consider whether the bank had a legitimate compliance reason to close the account, so the outcome is not may provide.
Frequently Asked Questions
Can I use a dormant company's bank account to receive payments from clients?
Technically yes, but the bank may close the account if they discover the company is dormant and receiving regular payments. The bank may interpret this as the company trading while dormant, which is not permitted. If you are receiving client payments, you should reactivate the company rather than keep it dormant.
What happens to money in a dormant company's bank account if the company is struck off?
Once a company is struck off the Companies House register, it ceases to exist in law. The bank will freeze the account and eventually return any funds to the company's last known address or to the Crown. You cannot access the money once the company is struck off, so if the account holds funds, you must withdraw them before striking off.
Do I need to keep a bank account open if my company is dormant?
No, you can close the dormant company's bank account at any time. However, if you plan to reactivate the company later, having an existing account can make the process faster. If you close the account, you will need to open a new one when you reactivate.
Can I open a personal bank account using a dormant company's name?
No. A personal account must be in your own name. A dormant company account must be a business account in the company's name. If you need to move money out of a dormant company account, you can transfer it to your personal account, but you cannot open a personal account under the company's name.
Will the bank charge fees on a dormant company account?
Yes, most banks charge monthly or annual fees for business accounts regardless of whether the company is dormant. Some banks waive fees if the account is inactive, but this is rare. Check your account terms or contact the bank to confirm what fees apply to your dormant account.