In a large business, it is easy to lose track of the number of processes, people and companies involved. Especially when an owner has an entire holding structure with several legal entities registered across different jurisdictions. One company may have been set up for a specific project, while another may have been incorporated “just in case” or for future use.

Eventually, the company simply remains within the structure: it formally exists but carries out no business activity. And this is often where a mistaken impression arises - that if a company does nothing, it requires no attention.

But that is not the case. An inactive company is not the same as a company that can simply be left unattended. As long as it exists, it needs to be monitored and its applicable obligations must be fulfilled.

1. Registered Address

First of all, it is important to keep track of the company’s registered address and ensure that it is renewed or maintained on time. A company must have a valid and up-to-date address and comply with all necessary registration formalities in order to maintain its proper status and good standing.

In practice, this is one of the things that is easiest to forget when a company is no longer being used. If it simply sits there for years, no one tends to think about address renewal dates or other administrative matters. People usually remember about them only when the company suddenly becomes necessary again.

Even if a company is not operating, its registration status should not be left unattended.

2. Reporting and Filings

The second point is reporting and filings. The absence of business activity does not necessarily mean that a company is exempt from all reporting obligations. In many cases, a company is still required to submit filings even if it has not carried out any transactions during the year.

In other words, “we have zero activity” is not the same as “we have nothing to file”. Required nil or zero filings must also be submitted within the applicable deadlines.

3. CFC Rules and Related Tax Obligations

If your company falls within the scope of Controlled Foreign Company (CFC) rules, it is important not to overlook the related obligations. Depending on the owner's country of tax residence and the specific structure, there may be requirements to notify the relevant authorities about ownership of a foreign company, submit reports or comply with other tax procedures.

It is also important to keep in mind that an inactive company does not necessarily mean that its owner has no obligations. Even if a company does not carry out any business activity, its status may still be relevant for CFC reporting purposes or similar rules in the owner's country of tax residence.

Therefore, if you own foreign companies, it is worth checking not only their corporate status, but also whether any obligations arise in relation to them under CFC rules or similar regulations.

4. Company Assets

It is also worth checking what assets remain with the company. For example, if a trademark is registered in the company’s name but you no longer plan to use the company, it is worth deciding in advance what should happen to that asset: whether to maintain its registration or, where necessary, transfer the rights to another individual or company.

These assets may include not only trademarks, but also domain names, intellectual property rights, interests in other companies or other assets.

Forgetting about the company is one thing. Forgetting about all the obligations and assets associated with it is quite another.

5. Don’t Forget About Companies Within Your Holding Structure

Even if one of the companies in your holding structure is currently inactive, it still remains part of the overall structure. Issues with its reporting, corporate status or good standing may affect not only the company itself, but also the reputation and perception of the entire holding - especially when the structure is being reviewed by banks, partners or investors.

It is also important to consider group reporting requirements and other obligations at the group level. One “forgotten” link can affect the entire structure.

Therefore, if there are companies within your structure that are not currently being used, this does not mean that they can simply be forgotten. It is worth periodically reviewing their status, reporting obligations, tax obligations and assets.

Sometimes, a few hours spent reviewing such a company today can save significantly more time, money and stress in the future.

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