Dormant Status Filing
Comprehensive Dormant Status Filing with OSBS Accounting Solutions Private Limited
Dormant Status Filing is a crucial compliance procedure for companies that are not currently conducting any business operations but need to remain registered under the Ministry of Corporate Affairs (MCA). It allows businesses to maintain their legal existence while reducing the compliance burden for companies that are not actively involved in business activities.
What is Dormant Status?
A company can apply for Dormant Status under Section 455 of the Companies Act, 2013 if it has not been involved in any business activity for a certain period and wishes to maintain its existence on the records of the MCA without undergoing regular compliance requirements. The dormant status helps companies avoid penalties and retain the option to resume operations in the future without starting from scratch.
Who Can Apply for Dormant Status?
Non-operational Companies: Companies that have not started operations or have stopped their business activities but still wish to retain their registration.
Inactive Companies: Companies that have ceased operations but wish to keep their corporate identity intact.
Holding Companies: If a company is a holding company and is not involved in any active operations of its own.
Private Limited Companies: Private companies that do not have any business activity and wish to file for dormant status.
Requirements for Dormant Status Filing
No Outstanding Liabilities: The company must not have any outstanding liabilities or debts.
No Ongoing Business Operations: The company must not be involved in business activities, such as generating revenue, purchasing assets, or hiring employees.
Annual Filing Obligations: The company must have filed all annual financial statements and annual returns up to the date of application.
Board Resolution: A board resolution must be passed by the company’s board members for applying for dormant status.
Benefits of Dormant Status Filing
Cost Savings: By applying for dormant status, companies can save on operational and compliance costs while maintaining their registration.
Ease of Resumption: Once in dormant status, the company can easily resume its business activities by filing the necessary documents to activate its operations.
Avoiding Penalties: Companies can avoid penalties for non-compliance or inactivity by filing for dormant status and complying with the filing requirements.
Legal Existence: The company remains registered with the MCA and retains its legal identity, allowing it to resume business at a later stage.
Steps Involved in Dormant Status Filing
Check Eligibility: Ensure that your company meets the eligibility criteria for filing for dormant status, including no active business operations and no outstanding liabilities.
Pass Board Resolution: Hold a board meeting and pass a resolution to apply for dormant status under Section 455 of the Companies Act, 2013.
Prepare Documents: Gather the necessary documents, including the board resolution, financial statements, and other required details.
File with MCA: Submit the application for dormant status via Form MSC-1 with the Ministry of Corporate Affairs (MCA).
Wait for Approval: Once the application is filed, wait for approval from the MCA. If approved, the company’s status will be changed to dormant.
Annual Compliance: Even though the company is dormant, it must comply with basic filing requirements such as submitting the Annual Return and Financial Statements every year.
Documents Required for Dormant Status Filing
Board Resolution: A resolution passed by the company’s board of directors to declare the company dormant.
Financial Statements: The company’s most recent financial statements, demonstrating that it has not been conducting any business activities.
Declaration of Non-liabilities: A declaration stating that the company has no outstanding liabilities or debts.
Other Documents: Additional documents as required by the Ministry of Corporate Affairs, depending on the specific circumstances of the company.
Consequences of Not Filing for Dormant Status
Penalty for Non-Compliance: If a company does not file for dormant status and fails to comply with the necessary filings, it could incur penalties and be classified as a non-compliant entity.
Striking Off: Companies that fail to maintain compliance may be struck off from the MCA register, leading to the loss of their legal existence.
Why Choose OSBS Accounting Solutions for Dormant Status Filing?
Expert Guidance: Our team provides expert guidance on the entire dormant status filing process, ensuring compliance with the Companies Act, 2013.
Timely Filing: We ensure that your application is submitted on time to avoid any penalties or compliance issues.
Comprehensive Support: OSBS Accounting Solutions handles the entire filing process, including document preparation and submission, to make the procedure seamless.
Peace of Mind: We help you maintain your company’s status and legal identity with minimal effort on your part.
Contact OSBS Accounting Solutions to file for Dormant Status today and maintain your company’s compliance effortlessly!
