The concept of Dormant Company is introduced under section 455 of the Companies Act, 2013 read with The Companies (Miscellaneous) Rules, 2014 and came into effect from 1st April, 2014. Basically, it's the status of company which is becomes dormant.
Dormant company in general means temporarily inactive. As per provision of Companies Act, 2013 any company can apply for dormant status of the company by making application to Registrar, if it fulfils the required conditions.
"Significant accounting transaction" means any transaction as mentioned below:
If company satisfies any of the following conditions then it can apply for dormant company:
Some of the Advantages of dormant company are:
Any company which is incorporated for future project or hold an asset or intellectual Property and has no significant accounting transaction or inactive company can apply for dormant status of the company.
Note that "Inactive Company" means 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.