Dormant company status ??

Open uri20170510 32134 tcchcu?1494421832 Jitendra Suthar asked over 3 years ago

One of my co. Is not filing annual returns and other compliances since financial year 2012..now plz let me knw A) can we apply to get the status of dormant co.? As in section 455 talks non filing of returns for 2 years. B) in future if we will reactive the co. Then all the pending returns will need to b filed ??

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4 Answers
Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 CA Sandeep Bohra answered almost 3 years ago

Dear Friend, --1) Where a company is formed and registered under this Act for a future project or to hold an asset or intellectual property and has no significant accounting transaction, such a company or an inactive company may make an application to the Registrar in such manner as may be prescribed for obtaining the status of a dormant company. Explanation.—For the purposes of this section,— (i) “inactive company” means a company which has not been carrying on any business or operation, or has not made any significant accounting transaction during the last two financial years, or has not filed financial statements and annual returns during the last two financial years; (ii) “significant accounting transaction” means any transaction other than— (a) payment of fees by a company to the Registrar; (b) payments made by it to fulfil the requirements of this Act or any other law; (c) allotment of shares to fulfil the requirements of this Act; and (d) payments for maintenance of its office and records. (2) The Registrar on consideration of the application shall allow the status of a dormant company to the applicant and issue a certificate in such form as may be prescribed to that effect. (3) The Registrar shall maintain a register of dormant companies in such form as may be prescribed. (4) In case of a company which has not filed financial statements or annual returns for two financial years consecutively, the Registrar shall issue a notice to that company and enter the name of such company in the register maintained for dormant companies. (5) A dormant company shall have such minimum number of directors, file such documents and pay such annual fee as may be prescribed to the Registrar to retain its dormant status in the register and may become an active company on an application made in this behalf accompanied by such documents and fee as may be prescribed. (6) The Registrar shall strike off the name of a dormant company from the register of dormant companies, which has failed to comply with the requirements of this section.

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 narahari answered almost 3 years ago

(1) Where a company is formed and registered under this Act for a future project or to hold an asset or intellectual property and has no significant accounting transaction, such a company or an inactive company may make an application to the Registrar in such manner as may be prescribed for obtaining the status of a dormant company. Explanation.—For the purposes of this section,— (i) “inactive company” means a company which has not been carrying on any business or operation, or has not made any significant accounting transaction during the last two financial years, or has not filed financial statements and annual returns during the last two financial years; (ii) “significant accounting transaction” means any transaction other than— (a) payment of fees by a company to the Registrar; (b) payments made by it to fulfil the requirements of this Act or any other law; (c) allotment of shares to fulfil the requirements of this Act; and

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Open uri20170510 32134 1c996lj?1494421732 Anil answered over 3 years ago

(1) Where a company is formed and registered under this Act for a future project or to hold an asset or intellectual property and has no significant accounting transaction, such a company or an inactive company may make an application to the Registrar in such manner as may be prescribed for obtaining the status of a dormant company. Explanation.—For the purposes of this section,— (i) “inactive company” means a company which has not been carrying on any business or operation, or has not made any significant accounting transaction during the last two financial years, or has not filed financial statements and annual returns during the last two financial years; (ii) “significant accounting transaction” means any transaction other than— (a) payment of fees by a company to the Registrar; (b) payments made by it to fulfil the requirements of this Act or any other law; (c) allotment of shares to fulfil the requirements of this Act; and (d) payments for maintenance of its office and records. (2) The Registrar on consideration of the application shall allow the status of a dormant company to the applicant and issue a certificate in such form as may be prescribed to that effect. (3) The Registrar shall maintain a register of dormant companies in such form as may be prescribed. (4) In case of a company which has not filed financial statements or annual returns for two financial years consecutively, the Registrar shall issue a notice to that company and enter the name of such company in the register maintained for dormant companies. (5) A dormant company shall have such minimum number of directors, file such documents and pay such annual fee as may be prescribed to the Registrar to retain its dormant status in the register and may become an active company on an application made in this behalf accompanied by such documents and fee as may be prescribed. (6) The Registrar shall strike off the name of a dormant company from the register of dormant companies, which has failed to comply with the requirements of this section.

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 Manisha answered over 3 years ago

Hi.... The Companies Act, 2013 introduces a concept of a dormant company within its ambit. It is the first time that such a concept is thought of, i.e. company which is not active. There is no definition of what constitutes a dormant company under the definition clause. A definition appears in section 455 of the Act and here also the concept is defined in a very roundabout manner. Section 455 states (1) Where a company is formed and registered under this Act for a future project or to hold an asset or intellectual property and has no significant accounting transaction, such a company or an inactive company may make an application to the Registrar in such manner as may be prescribed for obtaining the status of a dormant company. So dormant company can be a company formed for a future project or to hold an asset or intellectual property without there being any significant accounting transaction OR an inactive company. Now inactive company has been defined in section 455 as under: (i) “inactive company” means a company which has not been carrying on any business or operation, or has not made any significant accounting transaction during the last two financial years, or has not filed financial statements and annual returns during the last two financial years; So we get the definition of an inactive company from this definition which means that any company which has not been doing any business for the last two years OR (and here’s the doosra!!) they have not filed any financial statements and annual returns for the last two years. So it means any active company doing regular business and regular accounting transactions, but has failed to file its mandatory annual documents, then it can also be construed to become a dormant company!! **However a dormant company is still required to have minimum directors, hold minimum two Board meetings and file minimum one annual financial document with the Registrar.** **I. FORMS REQUIRED TO BE FILED WITH ROC AFTER STATUS OF DORMANT:** --------------------------------------------------------------- After Getting certificate of Dormant Company Forms which company can file with ROC are: ü A dormant company shall file a declaration annually in Form No. MSC-3 within thirty days from the end of each financial year. ü Company shall continue to file the return or returns of allotment and change in directors in the manner and within the time specified in the Act, whenever the company allots any security to any person or there is any change in the directors of the company. ü If company wants to get Active status to be file e-form MSC-4 with ROC, then gets active company status. ü If company carrying any “Significant transaction” during the dormant period, the directors shall within 7 days from such event, file an application with ROC in e-form MSC-4, for obtaining the status of an active company. II. The company may carry following business transaction in the period of Dormant: (a) Payment of fees by a company to the Registrar; (b) Payments made by it to fulfill the requirements of this Act or any other Law; (c) Allotment of shares to fulfill the requirements of this Act; and (d) Payments for maintenance of its office and records. III. One Person Company (OPC) can also be registered as a dormant company under section 455. IV. OTHER PROVISIONS: ü A dormant company shall have such Minimum Number of Directors. {A dormant company shall have a minimum number of three directors in case of a public company, two directors in case of a private company and one director in case of a One Person Company} ü File such documents and pay such annual fee as may be prescribed to the Registrar to retain its dormant status. ü A Dormant Company need not enclose cash flow statements in its annual accounts. ü A Dormant Company is required to convene at least one meeting of the Board of Directors has been conducted in each half of a calendar year and the gap between the two meetings is not less than ninety days. Section 173(5) V. A Dormant Company formation can prove useful when an individual wishes to stop trading for a specific period of time. For Example: if an individual has been running a successful company but wishes to move abroad, he can choose to preserve his company so that he can restart it at a later date by just doing some negligible formalities like registering his company as a Dormant Company with the registrar. Since a Dormant Company remains in the books of registrar for a considerable time it provides the company with a sense of maturity and might help to boost its credit worthiness.

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