CS Professional · Compliance Management, Audit and Due Diligence · Documentation and Maintenance of Records
Meera Ventures Pvt Ltd, an inactive company, has made no significant accounting transaction for two years. During that period it paid fees to the Registrar, paid office maintenance and record-keeping costs, and allotted shares only to meet a requirement of the Act. It has also filed no financial statements. A director states that these payments and allotment prevent it from being treated as having made a significant accounting transaction. Which view is correct under the Companies Act, 2013?
The director is correct. Under the explanation to section 455 of the Companies Act, 2013, Registrar fees, payments to meet legal requirements, allotment of shares to fulfil the Act's requirements and payments for maintaining office and records are excluded from significant accounting transactions, so these items do not make the company active.
- AThe director is wrong because any payment is a significant accounting transaction
- BThe director is wrong because the allotment alone is significant
- CThe director is correct only if the Registrar has already issued a notice
- DThe director is correct, because payments of Registrar fees, payments to fulfil legal requirements, allotment of shares to fulfil the Act's requirements and payments for maintaining office and records are excluded from significant accounting transactionsCorrect
Explanation
The Explanation to section 455 defines significant accounting transaction as any transaction other than Registrar fees, payments to fulfil requirements of law, allotment of shares to fulfil requirements of the Act, and payments for maintenance of office and records. All the described items fall in the excluded list, so they do not count. No prior Registrar notice is needed for this characterisation.
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