The Client Will Be in Touch

The last message was in April. It said the client was finalising something internally and would revert shortly, and it was entirely sincere. The file has been open since. It is not closed, because nobody closed it. It is not progressing, because nobody is progressing it. And it is not free, because the company it created continues to exist and continues to have obligations.

A dormant file is not a neutral state. It is a registered address somebody is paying for, a director quietly accruing a duty, a filing deadline with no interest in the client's internal process, and a bank that will shortly write to ask why nothing has moved on the account since the spring.

The file did not close. It stopped.

There is a useful distinction here that almost nobody draws at the time. A closed file has an ending: the work was done, or it was cancelled, and either way somebody made a decision and the consequences were handled. A stopped file has no ending. It has a last message.

The difference matters because the obligations attach to the company, not to the project. The registry does not know the client has gone quiet. It knows only that an entity exists, that an entity must file, and that the date is the date. Nobody has ever successfully explained to a registry that the deadline should move because the founder is reconsidering the business model.

A company that has stopped being used has not stopped being a company. It has merely stopped being supervised.

What a stopped file goes on costing

The running total is rarely dramatic, which is exactly why it goes unnoticed. It accumulates in small, reasonable instalments, each of which looks like the cost of doing nothing.

• The registered address. Billed annually whether or not any post arrives. The post, when it does arrive, goes to an address nobody is reading.
• The director. If a local director was appointed, the appointment is live. Duties do not pause for inactivity, and in several jurisdictions neither does personal exposure.
• The filings. Annual accounts, confirmation statements, nil returns, beneficial-ownership updates. A dormant company usually still files; it simply files that it did nothing.
• The tax registration. Once registered, a company is on a list. Coming off the list is a procedure in its own right, and it is not the procedure of ignoring the list.
• The bank. An account with no movement eventually attracts a review. The review is polite. Its conclusion is frequently not.

None of these is expensive. All of them together, for eighteen months, are more expensive than the structure cost to build.

The three kinds of silence

They look identical in an inbox and behave completely differently, which is why guessing is a poor strategy.

The first is deferral. The client's plan is intact; something upstream slipped. A funding round, a partner, a contract that was supposed to be signed in March. This silence ends on its own, usually with a message beginning "sorry for the delay" and a request to move quickly.

The second is reconsideration. The client has begun to doubt the structure, or the jurisdiction, or the whole venture, and would rather not say so while still deciding. This silence also ends, but it ends in a different direction, and the longer it runs the more it costs, because the company keeps existing throughout.

The third is abandonment. The client has moved on and has not noticed that something was left running in their name. This silence does not end. It is discovered, usually by a letter, often by an accountant, occasionally by a bank, and always later than would have been convenient.

What to do on day sixty

Not day thirty: a month of quiet is ordinary and chasing it reads as anxiety. Day sixty, though, is the point at which the file should be handled rather than waited on.

Send one message that does three things. State plainly what is currently running — the address, the filings, the next deadline, the approximate annual cost of leaving things as they are. Offer the two real options: continue, or wind down cleanly. And give a date after which the file will be put into a dormant state with its obligations itemised in writing.

This is not pressure. It is the opposite of pressure: it converts an open-ended liability into a decision with two legible outcomes. Clients, in the author's experience, are rarely annoyed by the message and are frequently relieved. The ones who were deferring reply within a week. The ones who were reconsidering finally say so. The ones who had abandoned it are grateful to be told, and occasionally surprised.

The quiet conclusion

The error is not that clients go quiet; clients have always gone quiet, and they have good reasons roughly half the time. The error is treating the pause as though it were free, and treating the file as though it were waiting rather than running.

Every provider has one of these somewhere — a company incorporated for somebody who meant to come back, still filing, still billed, still technically alive. It is not a disaster. It is just the most predictable cost in the business, and the only one nobody puts in the proposal.