{"id":4403,"date":"2020-03-02T13:37:08","date_gmt":"2020-03-02T13:37:08","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=4403"},"modified":"2020-12-11T15:37:44","modified_gmt":"2020-12-11T10:07:44","slug":"conversion-of-dormant-company-into-active-company","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/conversion-of-dormant-company-into-active-company\/","title":{"rendered":"Conversion of Dormant Company into Active Company"},"content":{"rendered":"\n<p class=\"has-drop-cap\">The concept of Dormant Company is newly introduced in the <strong><em>Companies Act, 2013<\/em><\/strong>. <strong><em>A Dormant Company is a Company, which is not carrying out any \u2018accounting transaction\u2019 and which is formed for a future project or to hold an asset or intellectual property.<\/em><\/strong> The Dormant Company can obtain the status of a Dormant Company by making an application to the Registrar of Companies (RoC). The Conversion of Dormant Company status can at any time be changed into Active Company. &nbsp;In this article, the Conversion of Dormant Company into Active Company after availing successful <a href=\"https:\/\/corpbiz.io\/company-registration\"><strong>company registration<\/strong><\/a> will be discussed. <\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/conversion-of-dormant-company-into-active-company\/#What_are_the_benefits_of_obtaining_a_Dormant_Status_for_a_Company\" >What\nare the benefits of obtaining a Dormant Status for a Company?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/conversion-of-dormant-company-into-active-company\/#What_are_the_Procedural_Formalities_to_get_the_Status_of_a_Dormant_Company\" >What are the Procedural Formalities to get the Status of a Dormant Company?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/conversion-of-dormant-company-into-active-company\/#What_is_the_procedure_followed_for_the_Conversion_of_Dormant_Company_into_Active_Company\" >What\nis the procedure followed for the Conversion of Dormant Company into Active\nCompany?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/conversion-of-dormant-company-into-active-company\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_are_the_benefits_of_obtaining_a_Dormant_Status_for_a_Company\"><\/span>What\nare the benefits of obtaining a Dormant Status for a Company?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The\ncore policy of a Dormant Company is to invest now and shine later. The longer\nis someone exists, the higher you are valued. The primary purpose of retaining\nthe dormant status of the company is that the company maintains its corporate\nstatus despite not carrying out business. <strong><em>The benefits obtained from Dormant Status\nare summarized below:<\/em><\/strong><\/p>\n\n\n\n<ul><li>The company can\nvoluntarily apply to Registrar of Companies (RoC) in e-form <strong><em>MSC-1<\/em><\/strong>,\nor<\/li><li>The Registrar\ncan issue a notice to company who has not filed any Financial Statements\/\nAnnual Returns for 2 consecutive years and can enter the name of such Company\nin Register of Dormant Companies. <\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_are_the_Procedural_Formalities_to_get_the_Status_of_a_Dormant_Company\"><\/span>What are the Procedural Formalities to get the Status of a Dormant Company?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong><em>The procedure followed for obtaining the status of a Dormant Company is as follows:<\/em><\/strong><\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter is-resized\"><img decoding=\"async\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/03\/image-1.png\" alt=\" status of a Dormant Company\" class=\"wp-image-4404\" width=\"530\" height=\"404\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/03\/image-1.png 590w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/03\/image-1-300x229.png 300w\" sizes=\"(max-width: 530px) 100vw, 530px\" \/><\/figure><\/div>\n\n\n\n<h3 class=\"wp-block-heading\">Board\nMeeting<\/h3>\n\n\n\n<p>Fixing\nand convening a Board Meeting for approval from Board and also approving a\nnotice for General Meeting.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">General\nMeeting<\/h3>\n\n\n\n<p>In\nGeneral Meeting approval of members of company is taken for making an\napplication of Dormant Status of the Company. A special resolution is passed in\nGeneral Meeting by the members. File Form MGT-14 within 30 days of passing the\nresolution in the General Meeting.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Filing\nForm MSC-1<\/h3>\n\n\n\n<p>File\ne-form MSC-1 to Registrar, i.e. filing for application of the dormant status of\ncompany. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Issue\nCertificate <\/h3>\n\n\n\n<p>Registrar\nwill consider and approve the application. Hence, Registrar will issue a\ncertificate in Form MSC-2 for the dormant status of the company.&nbsp; <\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Maintain\nRegister of Dormant Companies<\/h3>\n\n\n\n<p>The Registrar also has to maintain the Register of the Dormant Companies. The Register is maintained on the <strong><em>Ministry of Corporate Affairs (MCA)<\/em><\/strong><sup><a href=\"http:\/\/www.mca.gov.in\/\">[1]<\/a><\/sup> website or any specified website. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_the_procedure_followed_for_the_Conversion_of_Dormant_Company_into_Active_Company\"><\/span>What\nis the procedure followed for the Conversion of Dormant Company into Active\nCompany?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong><em>In\nthe following situations, the Conversion of Dormant Company into Active Company\nis done by the Registrar of Companies (RoC):<\/em><\/strong><\/p>\n\n\n\n<ul><li>Conversion of\nDormant Company into Active Company is done Voluntarily<\/li><li>Registrar of\nCompanies does the conversion of Dormant Company into Active Company by\nStriking Off<\/li><li>Conversion of Dormant\nCompany into Active Company is done when Dormant Company is functioning as an\nActive Company<\/li><\/ul>\n\n\n\n<p><strong><em>In\ncase if the Conversion of Dormant Company into an active company is done voluntarily,\nthe following steps are followed:<\/em><\/strong><\/p>\n\n\n\n<ul><li>The Dormant\nCompany should make an application for conversion of Dormant Company status\ninto an Active Company <strong><em>in Form MSC-4.<\/em><\/strong> <\/li><li>The fee as\nprescribed under <strong><em>Companies (Registration Offices and Fees) Rules, 2014<\/em><\/strong>, should also\nto be paid with an application filed for Conversion of Dormant Company into\nActive Company.&nbsp; <strong><em>The MSC-4 should be accompanied\nby the return Form MSC-3 of the Dormant Company. <\/em><\/strong><\/li><li>After\nconsidering the application filed, the Registrar can approve the application\nand <strong><em>issue\na certificate in Form MSC-5<\/em><\/strong>, allowing the status of the Dormant Company\nto be an Active Company.<\/li><\/ul>\n\n\n\n<p><strong><em>In\ncase the Registrar Strike off the company, the following steps are followed:<\/em><\/strong><\/p>\n\n\n\n<ul><li>If the company\nis in dormant status for 5 consecutive years, then the Registrar shall start\nthe process of striking off name of such company from the Register of Dormant\nCompanies. In this case, the applicant should apply for the Conversion of Dormant\nCompany into Active Company, or the Registrar will voluntarily strike off the\ncompany from the Register of dormant Companies. <\/li><li>After considering\nthe application filed, the Registrar can approve the application and issue a\ncertificate in Form MSC-5, allowing the status of the Dormant Company to be an\nActive Company.<\/li><\/ul>\n\n\n\n<p><strong><em>In\ncase the Dormant Company is functioning as an Active Company, the following\nsteps are to be followed:<\/em><\/strong><\/p>\n\n\n\n<ul><li>Whenever a Dormant\nCompany does any act mentioned in the grounds of the application Form MSC-1,\naffecting its status of Dormant Company. The Directors shall file an\napplication for obtaining the status of an active Company within 7 days when\nthis act was done. <\/li><li>Once the\nRegistrar considers the application, then the Registrar can issue the\ncertificate in Form MSC-5. <\/li><li>In enquiries, if\nthe Registrar finds out that the company which is registered as a Dormant\nCompany is functioning in actual and it is under his\/her jurisdiction, then the\nRegistrar can initiate proceedings against the Dormant Company. &nbsp;<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p> If a Company chooses a back seat for a good reason, then they can always restart the business whenever they want. So, being a dormant company, the company may not be doing business actively, but it is still considered as a Company in the eyes of the law. The Conversion of Dormant Company can always be done into Active Company according to the rules prescribed by the Companies Act, 2013. We at <a href=\"https:\/\/corpbiz.io\/\"><strong>Corpbiz<\/strong><\/a> assist you with the procedure followed for the Conversion of Dormant Company into Active Company. Our professionals will ensure the successful completion of your work. \u00a0 <\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/change-in-status-of-company-from-active-to-dormant\/\">\nChange in Status of Company From Active to Dormant<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The concept of Dormant Company is newly introduced in the Companies Act, 2013. A Dormant Company is a Company, which is not carrying out any \u2018accounting transaction\u2019 and which is formed for a future project or to hold an asset or intellectual property. The Dormant Company can obtain the status of a Dormant Company by [&hellip;]<\/p>\n","protected":false},"author":16,"featured_media":4405,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[120,340],"tags":[372],"acf":{"service_id":"321"},"authorName":"Sakshi Sharda","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/02\/sakshi-sharda.jpg","authorDescription":"Sakshi Sharda has done BBALLB(HONS) and holds a strong knowledge on the matters pertaining to finance and law. From the past one year she is working as a legal advisor and in her leisure time she works on improvising her knowledge. Sakshi is spreading her knowledge by writing for Corpbiz.","postViews":17751,"readingTime":4,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/4403"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/16"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=4403"}],"version-history":[{"count":9,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/4403\/revisions"}],"predecessor-version":[{"id":21666,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/4403\/revisions\/21666"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/4405"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=4403"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=4403"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=4403"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}