DORMANT COMPANY UNDER COMPANIES ACT 2013
BY SUSHMA GOWDA
INTRODUCTION
A group of person form a company for a future project they acquire the status of “Dormant Company”.
Under Section 455 Dormant Company means any of the following type of company:
1) A Company registered for future project or to hold an asset or intellectual property with no significant accounting transaction.
2) Inactive Company
Such Company may make an application to register in FORM MSC-1 under the Companies (Miscellaneous) Rules, 2014 for obtaining the status of Dormant Company.
One person Company, Private Limited Company or Limited Company may apply for dormant company and they can enjoy the exemption available from Mandatory Compliance.
INACTIVE COMPANY
SIGNIFICANT ACCOUNTING TRANSACTION
There are certain payment which will not be included such as ROC fees, to fulfil requirement of the company act by law, Allotment of shares. Maintenance of its Office and records as a significant Account transaction.
Company which comes under section 455 of Companies Act, 2013 read with rule 3 to 8 of Companies (miscellaneous) Rules, 2014 under chapter XXIX need to pass a special resolution in General Meeting with the consent of 3/4th of shareholders.
BENEFITS
It requires the Less Compliance as Compared to other Company.
ELIGIBILITY
No Default have been conducted No Prosecution have been taken place by Company
Company While getting registered should not have outstanding loan, deposit, statutory dues or Workmen dues etc.
No Cash Flow statement should be provided in the case of Dormant Company.
NUMBER OF DIRECTORS REQUIRED TO GET REGISTERED AS DORMANT COMPANY
In Case of public company 3 directors, 2 in case of private company & 1 in case of OPC (One person Company).
BOARD MEETING
Gap between two meeting is not less than 90 days.
DOCUMENTS TO BE UPLOADED IN DORMANT COMPANIES
Auditor by the Chartered Accountant in practice shall be in the E-FORM MSC-3 within 30 days from the end of financial year.
If the company is dormant for the period of more than 5 years than it will be considered as Striking off of the company.
Under Section 455(4) Notice to Company by registrar
The Registrar shall issue a notice to that company who had not filed the financial statement for the period of 2 years.
Under Section 455(6) Strike off the name
The company who failed to comply with the provision of the company as per the Section 455 of the companies act 2013, will be strike off the name of the company.
EXEMPTION/PRIVILEGES OF DORMANT COMPANY
The Dormant company shall not include the cash flow statement as per the Section 2(40)
It is required to hold at least one board meeting of board of director in each half of calendar year, as per Section 175(5) of Companies Act 2013.
CERTIFICATE
After complying with all the provision of the companies Act 2013 they get the certificate in FORM MSC-5
