Many of the time one get confused while differentiating among Defaulting Company, Defunct Company, and Dormant Company. Here we are going to listing out all the major differences.
As per FTE circular No. 36/2011 dated 07th June 2011, Defunct Company are those companies which
- Has Nil Assets and Liabilities and have
- Not commenced any business activity or operation since incorporation or
- Not carrying over any business activity or operation for last one year before applying for FTE
If the company has not filed its due balance sheet or annual returns for any financial year i.e. from 2006-07 onwards then such company shall be treated as a defaulting company. Such company will not be allowed to file any e-form (except for the list of e-forms mentioned below) unless all the due balance sheets and annual returns are filed.The defaulting status of the company is displayed on the master data of the company.
Forms allowed to be filed:
- Form DIR-12 – for change in directors
- Form 20B, Form 21A, Form 23AC, Form 23ACA, Form 23AC- XBRL, Form 23ACA- XBRL, AOC -4 , AOC – 4 XBRL, MGT – 7, ADT – 1, Form 66, Form INC-28, Investor complaint form, Forms related to Cost Audit Branch (Form 23C, Form 23D, Form I- Cost Audit report,) – Annual filing Forms
- Form GNL-1 – for option ‘Compounding of offense’
- Form FTE – FOR CLOSURE OF COMPANY
- Form PAS-3 – FOR RETURN OF ALLOTMENT OF SHARES
- Form SH-7- FOR INCREASE IN AUTHORISED CAPITAL
- Form MGT-14 – FOR FILING SPECIAL RESOLUTION, AGREEMENT WITH ROC
- Form CHG-1 and form CHG-9 •Form CHG-4 – FOR CREATION, MODIFICATION, SATISFACTION, AND COMPOUNDING OF CHARGE
Forms not allowed to be filed:
- INC – 1 – for change in name
- INC – 22 – FOR CHANGE IN REGISTERED OFFICE
- ANY OTHER FORM FOR ANY EXTRAORDINARY ACTIVITY
WHAT ARE CONSEQUENCES OF STATUS AS DEFAULTING:
- Signing of any e-Form on MCA portal (for any company) by the signatories of the defaulting company is not allowed (except for the list of e-forms allowed). However, the signing for the exception list shall be allowed only in respect of the defaulting company and not in respect of any other company.
- The company along with its Directors may receive notice from ROC asking the reason for non-filing of forms.
- Directors may have to appear before the Court and explain the reason thereof.
- Directors and Company may have to pay penalty other than Additional fees.
HOW TO REMOVE DEFAULTING STATUS:
- By filing annual filing forms of the company for all financial years for which it is pending.
This new concept is introduced by Companies Act 2013. This is another option for Companies which do not have any significant transactions presently and are not carrying on any business, however, it cannot be closed due to the holding of assets to or have hopes for future expansion.New Companies Act enacted in 2013, under section 455, has brought a concept of Dormant Company.
- Companies which can register as Dormant Company-
- a company formed and registered under this Act for a future project or
- To hold an asset or intellectual property and
- has no significant accounting transaction
- An inactive company:
- 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
“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.
may make an application to the Registrar in such manner as may be prescribed for obtaining the status of a dormant company. If you have any query please comment in the comment box below or contact us We would love to help you.