A Limited Company or Private Limited Company or One Person Company can enlist itself as a dormant organization and benefit certain exceptions from compulsory compliances. Lethargic company status is for the most part gotten for companies enlisted to hold a benefit or protected innovation and have no signiﬁcant bookkeeping exchanges. In this article, we take a gander at the technique for enrolling as a lethargic company in India and its points of interest.
What is a dormant company?
As per the Companies Act, 2013, the deﬁnition for a dormant company is:
“Where acompany is framed and enlisted under this Act for a future venture or to hold an advantage or protected innovation and has no signiﬁcant bookkeeping exchange, such acompany or an inert company may make an application to the Registrar in such way as might be recommended for getting the status of a dormantcompany. Clarification. — For the motivations behind this segment,
- “Dormant Company” implies an company which has not been carrying on any business or operation, or has not made any signiﬁcant bookkeeping exchange amid the last two ﬁnancial years, or has not ﬁled ﬁnancial explanations and yearly returns amid the last two ﬁnancial years;
- “Signiﬁcant bookkeeping exchange” implies any exchange other than—1. instalment of expenses by acompany to the Registrar; 2. instalments made by it to fulﬁl the prerequisites of this Act or whatever other law;
- Allocation of shares to fulﬁl the necessities of this Act; and
- Instalments for support of its oﬃce and records; Therefore, any company that desires to be just an advantage company or have no signiﬁcant business exercises can apply and turn into a lethargic company.
Eligibility for registering as dormant company
A company can apply for and become a dormant company, only if the following criteria are satisﬁed:
- No examination, request or examination has been requested or taken up or completed against the company;
- No indictment has been started and pending against the company under any law;
- The company is neither having any open stores which are exceptional nor the company is in default in instalment thereof or intrigue subsequently;
- The company is not having any extraordinary credit, whether secured or unsecured: Provided that if there is any remarkable unsecured advance, the company may apply under this manage in the wake of getting simultaneousness of the bank and encasing the same with Form MSC-1;
- There is no debate in the administration or responsibility for company and a certiﬁcate in such manner is encased with Form MSC-1;
- The company does not have any exceptional statutory expenses, duty, obligations and so forth payable to the Central Government or any State Government or nearby powers and so on.
- The company has not defaulted in the installment of labourer’s levy
- The securities of the company are not recorded on any stock trade inside or outside India.
Procedure for registering as a dormant company
To acquire the status of lethargic company, the accompanying strides must be trailed by the company:
The company must ﬁrst lead a General Meeting of the Board and pass an extraordinary resolution for applying to wind up distinctly as a lethargic company or send notice of the same to all shareholders and acquire assent of atleast 3/4 of the shareholders in esteem. Once, the Board Resolution or shareholder’s endorsement is acquired, the same can be ﬁled with MSC-1 (Application for status of dormantcompany) with the imperative expenses. In the event that the Registrar is satisﬁed with the application, then a Certiﬁcate will be issued by the Registrar in MSC-2 permitting the status of dormantcompany. Subtle elements of all dormantcompanies are kept up by the Registrar furthermore distributed on the MCA site Dormantcompanies are required to ﬁle an “Arrival of Dormant Company” every year before April 30th with the Ministry of Corporate Aﬀairs. The arrival of lethargic company must incorporate detail of ﬁnancial position of the company appropriately examined by a Chartered Accountant by and by. The arrival of dormantcompany is ﬁled usingForm MSC-3. To re-establish the dynamic company status, an application can be made to the Registrar in shape MSC.
On the off chance that the Registrar is satisﬁed with the application, the company will be re-established to dynamic status by issuance of MSC-5. Once acompany is enrolled as a lethargic company, the yearly return for the company can be ﬁled utilizing a simpliﬁed frame MSC-3. Additionally, the quantity of Board Meetings to be led by the Company is decreased and the consistence weight is lessened.
To register your Dormant Company click here
Author: This blog is written by Ms. Suyogya Awasthy, a passionate blogger & intern at Aapka Consultant.
Visit: Aapka Consultant to get Online Services of CA CS & Lawyers.