AT least a seventh of all Dorset's registered companies are dormant - they carry out no business at all, a new report reveals.

Of the 36,823 companies registered in Dorset, nearly 5,000 are dormant, according to new data from Poole chartered accountants Mazars.

And yet each dormant firm could be costing their owners between £3,500 and £5,000 in administration costs.

All these dormant companies sitting around doing nothing could together be costing their owners millions of pounds in running costs.

Mazars partner Adrian Simpson said: "Companies House defines a dormant company as one that has no entries in its financial records in a financial year.

"In spite of this, dormant companies must still submit an annual return along with other financial documents such as balance sheets.

"Failure to do so can result in late payment penalties or prosecution."

There are reasons for holding dormant companies - such as protecting company names or holding assets or intellectual property.

But "it is all too common for directors or parent companies to simply lose track of subsidiaries," said Mr Simpson.

"This is particularly common following a series of mergers, acquisitions or other restructures - all of which can result in a lot of unnecessary clutter in the accounts and wasted time and money spent administering otherwise irrelevant companies."

So a spot of corporate spring cleaning might be an idea.

"Dissolving a dormant company can cost anything from £10 to the equivalent of maintaining it for one year, so it makes sense to regularly review corporate structures to ensure only those dormant companies that need to be maintained actually are."

Mazars' research is based on registered companies within Dorset. It does not include figures for sole traders or partnerships.