Friday, 21 August 2015

HOW TO NORMALISE DORMANT COMPANY

HOW TO NORMALISE DORMANT COMPANY

When a company is formed and registered under Companies Act 2013 for some future project and has no significant accounting transaction, such inactive company can make application to registrar for dormant Status.

Now, when that future project has come up or very near, and you are willing to again make it active, then, you need to follow some key steps as below;

Application for seeking status of an active company:

·         An application under sub-section (5) of section 455, for obtaining the status of an active company shall be made in Form MSC-4 along with the fees as prescribed  and shall be accompanied by a return in form MSC-3 in respect of the financial year in which the application for obtaining the status  of an active company is being filed.
It is to be noted that the registrar shall initiate the process of striking off the name of the company if the company remains as a dormant company for the period of consecutive 5 years.
·         The Registrar shall, after considering the application filed under rule as discussed above , issue a certificate in Form MSC-5 allowing the status of an active company to the applicant.
·         Where a dormant company does or omits to do any act mentioned in the grounds of application in form MSC-1 submitted to Registrar for obtaining the status of dormant company, affecting its status of dormant company, the directors shall within 7 days from such event, file an application, for obtaining the status of an active company.
·         Where the Registrar has reasonable cause to believe that any company registered as ‘dormant company’ under his jurisdiction has been functioning in any manner, directly or indirectly, he may initiate the proceedings for enquiry and if, after giving a reasonable opportunity of being heard to the company in this regard, it is found that the company has actually been functioning, the Registrar may remove the name of such company from register of dormant company and treat it as an active company.
It is important to note that a dormant company is required to file Annual Return indicating financial position duly audited by a Chartered Accountant in Practice in eForm MSC 3 every year within 30 days from the end of each Financial Year.
Further to this, otherwise, the dormant company shall continue to file other event based compliances in the same manner as if it is an active company.

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