Repeated use of dormant companies - a concern?

[djohnson]

I’m looking at doing a property type transaction with someone, I’m loosely acquainted with him but don’t know him well. Hence I did some quick research to check his background. Looking on companies house over the last 20 or so years he’s repeatedly set up companies, the pattern seems to be that they’re set up, exist for a couple of years filing dormant account with very little on the balance sheet, and then get struck off. He’s using several variations of his name on companies house, and the registered addresses are different London addresses all of which have many many companies registered there (hence assume they’re some sort of company set up / admin service). There have been at least 15 instances of this over the last 20 years (and probably more since I may not have found all variants of his name). So too many for it to be a case of something being set up and then plans changing. I can’t decide if this is an issue or not. I’m aware that people will set up a company, trade it and then dissolve it before accounts / tax return is due but this doesn’t look like that since the entities exist for a few years and file accounts (albeit dormant ones). My background is finance, but I can’t see why someone would do this and what it achieves either legitimately or otherwise, it looks like a load of cost and admin for no reason. Any ideas please? Should I be concerned or just ignore it?

[s2kjock]

Seems odd to me.

The instances where I have seen dormant companies is where a project was started or envisaged, but never took of or was put on hold - in this case they usually stay around for a while though "just in case" they decide to resurrect them as the compliance is often no big deal.

The other instance I have seen them was to help protect certain trading names, and these will just continue to be filed with no dissolution or striking off.

Sure people may start projects that may not all get off the ground, but if happening frequently and with a short lifespan it might indicate they don't have a great track record.

Whether this provides opportunity for dodgy activities I am not sure.