Concept of a dormant company under section 455

Under this act a company is incorporated for their upcoming project or to keep a benefit or intellectual property. It is not an important concept of transaction of accounting, an inactive company or a company form an application to the registrar.

Companies (Miscellaneous) Rules, 2014

Application  

Under the section 455 a company form an application with MSC-1 as mentioned in companies (registration offices and fees) rules 2014. A dormant company is getting the registrar under the section 455 after passing a declaration to this result in the company general meeting or after providing a notice to all the company shareholders and obtaining consent of at least 3/4th shareholders (in value) :

Assigned that a company shall be suitable to register under this rule only, if –

  • No investigation or inspection inquiry has been required or carried or taken up out against the company.
  • No action has been organized and pending against the company under any law
  • Neither, the company is having any public deposits which are excellent nor is the company in default in payment
  • The company is not owning any special loan, whether it is secured or unsecured.
  • If there is any remaining insecure loan, the company may allotting under this rule after getting agreement of the loaner and enclosure the same with form MSC-1.
  • There is no discussion in the organization or the company relation and a certificate in this value is enclosed with Form MSC-1.
  • The company does not include any remaining statutory taxes, dues, duties etc. It is owing to the local authorities, central government or any state government etc.,
  • The company has not any choice in the payment of employee’s charge.
  • The guarantees of the company are not registered on any stock exchange within or outside India.

For the plans of this section:

“Inactive company” refers a company is not involving any operation or business, or has not made any important accounting transaction with in the last two financial years, or has not registered under any financial statements and annual returns during the last two financial years.

  • Important accounting proceeding means any transaction other than
  • The amount of charges by a company to the registrar
  • The amounts are made by it to complete the needs of any other law or in this act
  • The portion of shares to complete the needs of this act
  • The amounts are keep in its office and records.
  • The registrar on discussion of their application shall authorize the rank of a dormant company to the applicant.

Concept of a dormant company under section 455

Companies (Miscellaneous) Rules 2014

After considering, the registrar shall registered in Form MSC-1 provide a certificate in Form MSC-2 permitting the rank of a dormant company to the applicant.

Register of dormant companies concept

A company is not registered under any financial statements or annual returns successfully for two financial years. The registrar shall provide and observe to that company and enter the name of that company. A dormant company have only minimum number of directors and file such documents pay such annual fee as may be authorized to the registrar to maintain its dormant status in the register

Minimum number of directors for dormant company

A dormant company contains three directors and public and private limited company have two directors and only one director for One Person Company.

Return of dormant companies

A dormant company register a “return of dormant company “yearly and  showing financial position correctly analyzed by a chartered accountant in exercise in form MSC-3 mentioned in the companies (registration offices and fees) rules, 2014 within a period of 30 days.

Assigned that the company shall keep to file the return of returns of portion and alter in directors in the method. The company assigns any change in the directors of the company or any security to any person.

Application for seeking status of an active company

The fee as allocated in the companies (registration offices and fees) rules 2014 for getting the position of an active company. The registrar shall commence the process of striking the company name. If the company is a dormant company it have a period of five consecutive years. A dormant company fails or perform any act mentioned in the grounds of application in Form MSC-1 presented to registrar for getting the position of dormant company. The directors shall file an application within 7 days under sub-rule (1) for getting the position of an active company.

Where the registrar has valid reason to believe that any company registered as dormant company under his power. It has been purposing in any mode directly or indirectly, he may commence the business for enquiry under the section 206. After providing a valuable opportunity of being heard to the company is consider, it is found that the company has really been serving the registrar may displace the company name.

Legislative Clause

This is a new section and wants to deal with dormant company. It provides that a dormant company shall not holding any business or has not made any important accounting transaction in the last two financial years. These kind of company may create an application to registrar for getting the position of dormant company. The registrar shall keep the register of dormant company and which shall maintain the minimum number of directors to pay any annual fees. This section also helps that in case of a company which has not registered annual return, balance sheet, profit and loss account for two financial years. It is maintained by the registrar and include the name as dormant company. So, the dormant company neglects to follow the requirements of this section then the name is strike off by the registrar.

Comparative analysis

Under this act, the company is registered and formed for a future project or to hold an intellectual property or an asset and has no important accounting transaction. In case a company which is not registered annual returns or financial statements for 2 consecutive financial years. A notice is given to the company by the registrar and include the company name as maintained dormant companies.

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