According to Companies House, a company is active if it has made significant accounting transactions during its most recent accounting period. If a company is active, it is required to submit full annual accounts and an Annual Return to Companies House every year.
This interpretation is different from HMRC’s interpretation of active.
A company is in administration if it is or is likely to become unable to pay its debts. When in administration, a company’s business affairs and property is managed by an administrator for the benefit of the creditors.
A company is considered Dormant if it doesn't trade and has no ‘significant accounting transactions’ during an accounting period. Dormant companies may be registered to hold a company name or for various other reasons. Dormant companies must still file annual accounts.
As long as a company isn’t dissolved, it’s obliged to submit company accounts. A dormant company must submit a balance sheet and any relevant notes to the accounts. Any transactions performed will mean filing full accounts to Companies House.
Dissolving is the process of removing or “striking off” a company from the register at Companies House.
In situations where a company has become surplus to requirements (i.e. it has fulfilled the purpose it initially set out to achieve) and is no longer trading, the most cost-effective and simple way forward for a director may be to apply to the Registrar to be struck off and dissolved.
Liquidation is when a company’s assets are extracted and used to pay off any remaining debts before that company is dissolved.