A Limited Company or Private Limited Company or One Person Company in India can register itself as a dormant company and avail certain exemptions from mandatory compliance. Dormant company status is mainly obtained for companies registered to hold an asset or intellectual property and have no significant accounting transactions.
Dormant Company:
The word “Dormant” means inactive or inoperative. Typically When a company is registered with the object:
- To hold intellectually property or assets for future projects and
- Having no significant accounting transaction
- Inactive company
- Such a company may make an application to the registrar of the company for obtaining the status of dormant company
Know More: “Why to Obtain Dormant Status?”
Significant Accounting Transaction:
Significant accounting transactions would mean transactions other than the basic procedural transactions i.e the payment of fees by a company to the Registrar and also payments 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.
Inactive Company:
“Inactive Company” means a company which has not been carrying on any business or operation, or has not made any significant accounting transaction during the last two financial years, or has not filed financial statements and annual returns during the last two financial years.
Conditions required to be fulfilled for maintaining the status of Dormant:
- A dormant company must have a minimum of directors which is 3 in case of public, 2 in case of private and 1 in case of an OPC.
- A dormant company shall file a “Return of Dormant company annually in Form No. MSC-3 within 30 days from the end of each financial year attaching financial statements audited by a CA in practice. The provisions relating to the rotation of auditors are not applicable to a dormant company.
- The company shall continue to file the returns of allotment and change in directors, whenever the company allots any security to any person or there is any change in the directors of the company.
Benefits of having Dormant Status:
- To revive and operate a company you intend to use in the future.
- To protect your interest and reputation as a sole trader.
- To hold a fixed asset such as a property.
- Less compliance.
Why Ebizfiling as your service provider for applying for “Dormant Company”?
EbizFiling.com is an eminent business platform and a progressive concept, which helps end-to-end incorporation, compliance, advisory, and management consultancy services to clients in India and abroad. Applying for “Dormant Company” status is easy, seamless, cheaper and quicker with EbizFiling.com! Apart from Dormant Company, Ebizfiling.com also helps you to meet with Strike Off Company, Company Annual Filing, GST return filing, IT return filing, etc easily. You may get in touch with our compliance manager on 09643203209 or email info@ebizfiling.com for free consultation.