DORMANT COMPANY
Section 455 of Companies Act, 2013 Dormant Company is an inactive company which has not been carrying any business or has not made any significant accounting transaction in the last two financial years.
“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
Such company may make an application to the Registrar to obtaining the status of a dormant company. Concurrently, the Registrar may also suo motu direct such a company for the status of a dormant company. The Registrar on consideration of the application allow the status of a dormant company to the applicant and issue a certificate to that effect. The Registrar shall maintain a register of Dormant Companies under the portal maintained by the Ministry of Corporate Affairs.
A company, once identified as dormant, will need to maintain only a minimum number of Directors and pay some annual fees as prescribed in the Companies (Registration Offices and Fees) Rules, 2014.
If the Dormant Company fails to comply with the requirements of the Section 455 of the Companies Act, 2013 the Registrar shall have the power to strike off its name.
Eligibility to apply for status of dormant company:-
(i) No inspection, inquiry or investigation has been ordered or taken up or carried out against the company.
(ii) No prosecution has been initiated and pending against the company under any law.
(iii) The company is neither having any public deposits which are outstanding nor is the company in default in payment thereof or interest thereon.
(iv) The company is not having any outstanding loan, whether secured or unsecured. If there is any outstanding unsecured loan, the company may apply after obtaining concurrence of the lender and enclosing the same with Form MSC-1.
(v) There is no dispute in the management or ownership of the company and a certificate in this regard is enclosed with Form MSC-1.
(vi) The company does not have any outstanding statutory taxes, dues, duties etc. payable to the Central
Government or any State Government or local authorities etc.
(vii) The company has not defaulted in the payment of workmen’s dues.
(viii) The securities of the company are not listed on any stock exchange within or outside India.
Procedure:-
- A company may make an application in Form MSC-1 along with such fee as provided in the Companies (Registration Offices and Fees) Rules, 2014 to the Registrar for obtaining the status of a Dormant Company in accordance with the provisions of section 455 after passing a special resolution to this effect in the general meeting of the company or after issuing a notice to all the shareholders of the company for this purpose and obtaining consent of at least 3/4th shareholders (in value).
- The Registrar shall, after considering the application filed in Form MSC-1, issue a certificate in Form MSC-2 allowing the status of a Dormant Company to the applicant.
- The Register maintained under the portal maintained by the Ministry of Corporate Affairs on its web-site www.mca.gov.in or any other website notified by the Central Government, shall be the register for dormant companies.
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