Where To Know More About Dormant Company

Where To Know More About Dormant Company

Where To Know More About Dormant Company

It is that company which does not involve, during a financial year, in any account transaction. there is no accounting records in this company. The sole aim of forming a dormant company is to protect the name of a company so that no one else can use it. sometimes, due to some reasons, a company may stop its working but would like to continue in future. this is considered to be a non- business period and during this time, the companies prefer dormancy.

Why one should opt for dormant company?

One of the main causes to have a dormant company is to keep a trade mark or brand name intact, which one wishes to have. There may be competitors in the same business or a different business who might pounce or snatch the trade mark or brand name from another company, before the actual company uses it. a company can have a dormancy period according to its wish since there is no time limit. there is a lack of financing and this could lead to cause of dormancy. the company wants to shut down itself because of this. once the company decides to resume, it can get into dormancy without allowing anyone to use its trade mark or brand name. clear document should be produced legally by the director or the head of the company to be in dormant form.

even though you are in dormant form, you must assure an annual return to the house of companies.

a file on the annual accounts should be produced by all dormant companies. its mandatory that the company should produce the report of accounts even if its not trading during the year.

Form DCA can be used in the financial year by the dormant companies without trade.

in case of change of address, the information should be given to the house of companies.

transactions cannot be done during dormancy, if so the company has to produce necessary files. there are few restricted zones where companies can make transaction and they are civil penalty of any kind, company name registration and payment to shareholders.

For a dormant company, it is not required to inform the house of companies once it starts trading as the company is bound to submit a file on all transactions made in that year. the company has to present themselves in front of directors and justify themselves if they fail to produce the details of transactions. this is considered to be an offence and the companies like this will be given severe penalty.

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