Skip to content

CS Executive · Company Law and Practice · Dormant Company

Veda Holdings Pvt Ltd was incorporated in 2023 solely to hold a trademark that it intends to use for a product launch some years later. It has had no significant accounting transaction since incorporation. Under the Companies Act, 2013, which description best fits its eligibility to apply for dormant status?

Veda Holdings may apply to the Registrar for dormant status. The Act permits a company formed for a future project or to hold an asset or intellectual property, with no significant accounting transaction, to seek that status. There is no five-year wait, no Tribunal application, and no bar on private companies.

  1. AIt may apply to the Registrar because it was formed to hold intellectual property and has no significant accounting transactionCorrect
  2. BIt cannot apply until it has remained inactive for five financial years
  3. CIt may apply only to the National Company Law Tribunal, not to the Registrar
  4. DIt cannot apply because a private company is not permitted to become dormant

Explanation

Section 455(1) allows a company formed and registered for a future project or to hold an asset or intellectual property, and having no significant accounting transaction, to apply to the Registrar for dormant status. No five-year wait applies and private companies are not excluded. The application goes to the Registrar, not the Tribunal.

Did you get it right without looking?

One question tells you little. A timed set on Dormant Company shows your real accuracy, how long you take and where you lose marks.

Practise Dormant CompanyFree diagnostic mock

More Dormant Company questions