Procedure to Obtain Dormant Status Under Companies Act, 2013 By CS Pankaj Malhotra


ELIGIBILITY:

Where a company is formed and registered under Companies Act, 1956 or 2013 for a future project or to hold an asset or intellectual property and has no significant accounting transaction, such company or an inactive company may make an application to the Registrar for obtaining a status of the dormant company.

Meaning of Inactive companies is those which has not been carrying on any business or profession or has not made any significant accounting transactions during the last two financial years or has not filed financial statements and annual returns during the last two financial years.

Significant Accounting Transaction means any transaction other than–
  • Payment of Fees by a company to the Registrar;
  • Payments made by it to fulfill the requirements of this Act or any other law;
  • Allotment of shares to fulfill the requirements of this Act; and
  • Payments for maintenance of its office and records.
PROCEDURE TO OBTAIN STATUS OF DORMANT COMPANY

Steps:

1. Pass Special Resolution in Extraordinary General Meeting or notice issued to all shareholders and consent of at least ¾ shareholders in value and file MSC-1.
Provided that a company shall be eligible to apply under this rule only, if-

(i) no inspection, inquiry or investigation has been ordered or taken up or carried out against the company;

(ii) no prosecution has been initiated and pending against the company under any law;

(iii) the company is neither having any public deposits which are outstanding nor the company is in default in payment thereof or interest thereon;

(iv) the company is not having any outstanding loan, whether secured or unsecured: In case of unsecured loan company can apply with NOC of lender there is no dispute in the management or ownership of the company and a certificate in this regard is enclosed with Form MSC-1;

(vi) the company does not have any outstanding statutory taxes, dues, duties etc. payable to the Central Government or any State Government or local authorities etc.;

(vii) the company has not defaulted in the payment of workmen’s dues; and

(viii) the securities of the company are not listed on any stock exchange within or outside India.

2. After consideration, Registrar issues certificate in Form MSC-2


3. Annual return shall be filed by dormant company indicating financial position audited by CA in practice within 30 days from the end of FY in Form MSC-3.
NOTE: FORMS REQUIRED TO BE FILED WITH ROC AFTER STATUS OF DORMANT:

Getting a certificate of Dormant Company Forms which company can file with ROC are:
  • A dormant company shall file a declaration annually in Form No. MSC-3 within thirty days from the end of each financial year.
  • Company shall continue to file the return or returns of allotment and change in directors in the manner and within the time specified in the Act, whenever the company allots any security to any person or there is any change in the directors of the company.
  • If a company wants to get Active status to file e-form MSC-4 with ROC, then gets active company status.
  • If company carrying any “Significant transaction” during the dormant period, the directors shall within 7 days from such event, file an application with ROC in e-form MSC-4, for obtaining the status of an active company. 
Other Important:
  • A dormant company shall have a minimum number of three directors in case of a public company, two directors in case of a private company and one director in case of a One Person Company:
  • Provided that the provisions of the Act in relation to the rotation of auditors shall not apply on dormant companies
  • One Person Company (OPC) can also be registered as a dormant company under section 455.
Fees Chart:

Application made

Other than OPC & Small company

OPC & Small company

(i)

 

a) Up to Rupees 25,00,000

b) Above Rupees 25,00,000 but up to Rupees 50,00,000

c) Above Rupees 50,00,000 but up to Rupees 5,00,00,000

d) Above Rupees 5,00,00,000 but up to Rupees 10 crore or more

e) Above Rupees 10 crore

 

2,000

5,000

10,000

15,000

20,000

1,000

2,500

N/A

N/A

N/A

(ii)

By a company limited by guarantee but not having a share capital

2,000

N/A

 
MSC-3 ( Annual Return by Dormant Company)

Nominal Share Capital                                                       Fee applicable

Less than 1,00,000                                                                Rupees 200
 
1,00,000 to 4,99,999                                                              Rupees 300
 
5,00,000 to 24,99,999                                                            Rupees 400
 
25,00,000 to 99,99,999                                                          Rupees 500
 
1,00,00,000 or more                                                               Rupees 600

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