It is often seen that some companies are found non-operational or are just incorporated in present for some future prospects/projects. These companies generally undertake no significant transactions for the accounting periods. Such companies can acquire the status of being Dormant either by an application voluntarily or on order of ROC. Section 455 of the Companies Act, 2013 specifies in detail the requirement, the status of companies as being dormant and its various compliance.
Unlike Active companies, companies those regarded as dormant are held exempted by MCA (Ministry of Corporate Affairs) for putting different compliance forms to government at different intervals. Anticipating future losses, backing up companies with a status of dormant leaves promoters of the company, an effective compliance cost cut solution. In this post, we have briefed you about seeking the status of your active company and putting essential notified forms to apply for the same.
Application for Obtaining Status of Dormant Company by the Company
Saving compliance efforts and approving off as a backup option, a company can be held with a status of being dormant by filling an e-form MSC-1. After passing a Special Resolution in a General Meeting or after obtaining the consent of at-least 3/4th of shareholders, the company can file e-form MSC-1.
ü No inspection, pending order, inquiry or investigation initiated/pending shall be there against the company.
ü The company shall not be in default of any public deposits or outstanding loans, interest, secured or unsecured liabilities.
ü There shall no be dispute held unsolved between the management and the owners of the company, nor the company should be in default of dues of workmen.
Inspecting all the above and other specified conditions, the ROC shall grant the dormant status certificate in e-form MSC-2 to the company. Being dormant, the company shall then have to hold a minimum of 3 directors in case of a public company, 2 directors in private and 1 in case of OPC and have to get its annual return in the form e-Form MSC-3.
Application for Seeking Status of Active Company by the Company
For companies gaining momentum of there, dormant status can check and apply for the status of their company as being “Active” by filling out an e-form MSC-4 enclosing the annual returns filed along with e-form MSC-3.
Seeking to the status of the company, ROC shall strike off the name of the company if held as dormant for a consecutive period of 5 years or shall allow the change of status of the company to Active issuing e-form MSC-5.
Essentials for filling e-form MSC – 4
- Obtain e-form MSC-4 online through the MCA portal
- Find the CIN of the dormant company on the MCA portal.
- Make sure you have rechecked the SRN numbers obtained while filling e-form MSC-1 and e-Form MSC 3.
- Assure digital signature of the following individuals before final submission of the e-form – Director, Manager, Company Secretary, CEO, CFO, CTO.
- Certified copy of board resolution.
The Registrar shall undertake a thorough search of the company records and returns filed. In case the company is found undertaking financial transactions while holding the status of a dormant company, the ROC shall initiate an inquiry on the company under Section 206 of the Companies Act and will take the necessary legal actions.
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