Skip to content

CS Professional · Compliance Management, Audit and Due Diligence · Documentation and Maintenance of Records

Lotus Ventures Ltd was incorporated to hold a patent for a future project. In the last two financial years its only payments were ROC fees, statutory filing costs and office and record maintenance charges. It wants dormant status. Under the Companies Act, 2013, how are these payments treated?

These payments are excluded from significant accounting transactions under Section 455: Registrar fees, payments to meet legal requirements and office and record maintenance costs. Since the company holds intellectual property for a future project and has no significant transaction, it may apply to the Registrar for dormant status.

  1. AThey are significant accounting transactions and bar dormant status
  2. BThey are not significant accounting transactions, so the company may apply to the Registrar for dormant statusCorrect
  3. CThey matter only if they exceed the paid-up capital
  4. DThey are significant only if made to the Registrar

Explanation

Section 455 excludes fees paid to the Registrar, payments to fulfil Act or other legal requirements, allotments to meet legal requirements, and payments for maintenance of office and records from significant accounting transactions. A company formed to hold intellectual property with no significant transaction may apply for dormant status. The first option wrongly counts excluded payments.

Did you get it right without looking?

One question tells you little. A timed set on Documentation and Maintenance of Records shows your real accuracy, how long you take and where you lose marks.

Practise Documentation and Maintenance of RecordsFree diagnostic mock

More Documentation and Maintenance of Records questions