Day: August 2, 2016

LESSER COST LESSER COMPLIANCES- DORMANT COMPANY

Status of a company can be of 3 types: Active, Inactive, and Dormant Companies (New Concept under Companies Act, 2013). Here we are about to discuss regarding the Dormant Companies. As per the dictionary, Dormant means alive but not actively growing.  Two types of companies can apply for this dormant status under Section 455 of Companies Act, 2013: Inactive Companies A company formed under Companies Act, 2013 for a future project or to hold an asset or intellectual property and has no significant accounting transaction. Proviso to Rule 8 of the Companies (Miscellaneous) Rules, 2014 says that a dormant company cannot remain as a dormant company for more than 5 consecutive financial years. If it remains so, then the Registrar shall commence the process of striking off the name of the company from the Records. In other words maximum tenure of a DORMANT COMPANY is 5 years. Before applying for the status of a Dormant Company, some conditions are to be followed: No inspection, Inquiry or Investigation, taken up or ordered against the company; No outstanding public deposits or defaults in payments thereof and interest thereon; The company has not defaulted in the payment of workmen’s dues; No listing of Securities of Company within or outside India; The company is not having any outstanding loan, whether Secured and Unsecured; NOTE: In case company having Unsecured Loan, It may apply...

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CS SUKHWINDER SINGH

LL.B; FCS; B.COM (P)

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Email: CS.SUKHWINDERSINGH@GMAIL.COM

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