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CS Executive · Company Law and Practice · Dormant Company

Vistara Heritage Pvt Ltd was incorporated to hold a trademark it acquired for a brand it plans to launch later. It has had no significant accounting transaction since incorporation. Under the Companies Act, 2013, what may the company do to be treated as dormant?

Such a company may apply to the Registrar in the prescribed manner for dormant status. A company formed to hold intellectual property with no significant accounting transaction qualifies. Dormancy is not automatic through a resolution, and the Tribunal has no role in granting it.

  1. APass a special resolution and automatically become dormant without any filing
  2. BMake an application to the Registrar in the prescribed manner for the status of a dormant companyCorrect
  3. CApply to the Tribunal for a declaration of dormant status
  4. DWait for the Registrar to enter its name in the register after two years

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. Dormancy is not automatic on a resolution, and the application is made to the Registrar, not the Tribunal. Waiting for the Registrar applies only to the two-year default case under sub-section (4), which is not a voluntary route.

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