Register as Dormant Company
Dormant means inactive or sleeping. Register as Dormant Company , As per Companies Act, 2013 a company is deemed inactive or dormant if:
- it does not carry on with its business operations on a regular basis.
- it does not have any significant transactions in the last two consecutive financial years.
- it has not filed annual returns in the last two consecutive financial years.
A dormant company is incorporated for future use. It does not have any significant accounting transactions but holds assets.
Getting a dormant status for your company is not easy. Your company needs to be eligible for it which is as follows:
- There should be no past or ongoing inspection or investigation against the company.
- No pending prosecution or court order against the company.
- No outstanding statutory dues, loans, taxes, etc. In case of an outstanding unsecured loan you can obtain consent from the lender and mention the same in form MSC-1.
- No dispute within management and those charged with governance regarding ownership.
- The company should not have any public deposits or outstanding interest to be paid.
- It should not have defaulted in payment of dues like workmen compensation etc.
- It should not be listed on any Indian or international stock exchange.
Register Trademark for ₹ 6,799 all inclusive
Only if these above mentioned criteria are fulfilled, a company is permitted to apply for dormant status.
Procedure for conversion
The procedure to obtain dormant status as follows:
- The Board of directors must conduct a Board Meeting and pass a special resolution in favor of dormant status. It should then send a notice to all the members of the company and obtain consent from at least 3/4 shareholders.
- After obtaining approval from the shareholders file Form MSC-1 with the Registrar. If the Registrar is satisfied with the application he shall issue a certificate of dormant status in Form MSC-2.
Every dormant company is mandatorily required to file Return of Dormant Company with the Ministry of Corporate Affairs (MCA). The return must be filed in Form MSC-3 before 30th April every year.
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