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CS Executive · Company Law and Practice · Legal Status and Types of Registered Companies

Vihaan Projects Pvt Ltd was incorporated to hold a plot of land for a future township and has carried out no significant accounting transaction. Its directors want the status of a dormant company. What is the correct course under the Companies Act, 2013?

The company may apply to the Registrar in the prescribed manner for dormant status. Section 455 permits a company formed for a future project or to hold an asset or intellectual property, with no significant accounting transaction, to seek this status directly from the Registrar.

  1. AThe company may apply to the Registrar in the prescribed manner for dormant statusCorrect
  2. BThe company must first apply to the National Company Law Tribunal for an order
  3. CThe company automatically becomes dormant after one year without any application
  4. DThe company must first be wound up and then re-registered as dormant

Explanation

Section 455(1) allows a company formed for a future project or to hold an asset or intellectual property, with no significant accounting transaction, to apply to the Registrar in the prescribed manner for dormant status. No Tribunal order is required, and status is not automatic on such an application basis. Winding up is not a precondition.

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