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CS Executive · Company Law and Practice · Dormant Company

Veda Holdings Pvt Ltd has been a dormant company for three years. Its directors now wish to resume business operations. Under the Companies Act, 2013, how can it become an active company?

A dormant company becomes active by applying to the Registrar with the prescribed documents and fee. Merely restarting business does not change its status on the register, and neither a Tribunal order nor a SEBI filing is the route the Act prescribes.

  1. ABy making an application to the Registrar accompanied by the prescribed documents and feeCorrect
  2. BAutomatically, once it starts any business transaction
  3. COnly by passing a special resolution and filing it with SEBI
  4. DOnly by an order of the Tribunal after a petition is filed

Explanation

Section 455(5) says a dormant company may become an active company on an application made in this behalf, accompanied by such documents and fee as may be prescribed. Resuming business alone does not change the status in the register. No Tribunal order or SEBI filing is required by the section.

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