{"id":52732,"date":"2021-09-24T11:29:40","date_gmt":"2021-09-24T05:59:40","guid":{"rendered":"https:\/\/enterslice.com\/learning\/?p=52732"},"modified":"2021-09-24T11:32:18","modified_gmt":"2021-09-24T06:02:18","slug":"dormant-inactive-company","status":"publish","type":"post","link":"https:\/\/enterslice.com\/learning\/dormant-inactive-company\/","title":{"rendered":"Dormant (Inactive) Company: Meaning, Benefits, Compliances etc."},"content":{"rendered":"

Dormant Company was introduced under the Companies Act 2013, and it was not there earlier in the Companies Act of 1956. Section 455 of the Companies Act 2013 provides for the dormant company. As per this section, Dormant Company means inactive company. In this article, we shall discuss certain essential aspects about Dormant (inactive) Company.<\/p>\n\n\n\n

What do you mean by Inactive Company?<\/h2>\n\n\n\n

Inactive company refers to a company which has not been carrying on any business or operation or a company that has not made any significant accounting<\/a> transaction during the previous 2 financial years or didn’t file financial statement and annual return during the last two financial years.<\/p>\n\n\n\n

So here comes the question as to what is the meaning of significant accounting transaction?<\/strong><\/em><\/p>\n\n\n\n

Here significant accounting transaction refers to the fact that the company has not been doing any transactions than making payment or fees to the ROC, making payment to meet regulatory requirements, making allotment<\/a> of shares and effecting payments to maintain office and records.<\/p>\n\n\n\n

How to obtain dormant status for a company?<\/h2>\n\n\n\n

Companies may get this status either by making an application on its own, or the ROC can initiate by issuing a notice in case of certain non-compliance and categorize the company as dormant company.<\/p>\n\n\n\n

Obtaining the status of dormant company voluntarily-<\/u><\/strong><\/p>\n\n\n\n

The idea behind the concept of dormant company is to benefit a company to begin a future project or hold an asset\/IP without having significant accounting transactions. As per the Companies Act, companies can make an application to obtain the status of dormant company, in case where the company is incorporated for a future project, incorporated for holding an asset or IP, company that has not filed any financial statement and annual return in the last 2 financial years and the company that is not carrying out any business or made any significant accounting transactions.<\/p>\n\n\n\n

Action by ROC-<\/u><\/strong><\/p>\n\n\n\n

In case where a company fails to file financial statement or annual return for 2 financial years consecutively, the ROC shall issue a notice to such company and enter the name of the company in the register maintained for dormant company.<\/p>\n\n\n\n

Pre-requisites for obtaining the status of Dormant Company<\/h2>\n\n\n\n

The pre-requisites for getting status of Dormant Company:<\/em><\/p>\n\n\n\n

\"Pre-requisites<\/figure><\/div>\n\n\n\n