Where To Know More About Dormant Company
dormant company is the one which has no involvement in any of the account transaction during the financial year. to put it in simple words, it has no accounting records. protecting the name of the company is the main aim of the company. to stop working temporarily and to continue in future is being carried out by some companies due to some reasons. 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. there is no specific time limit for a company to be in dormancy. there is a lack of financing and this could lead to cause of dormancy. the company wants to shut down itself because of this. Incase, it wants to resume in the near future, it can go into dormancy, without letting anyone use its name or trade mark. To be in a dormant form, the head or the director of a company must produce some documents to justify its dormancy, infront of a legal administration.
You must be able to assure an annual return to the house of companies, although you are in dormant form.
all dormant companies must necessarily produce the files on its annual accounts in the house of companies. Even if a company is not trading during a year, they have to submit an accounts file.
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.
During the dormancy period, a company cannot do, even a single transaction, otherwise it has to produce a file for the same. Few restricted zones where a company can make transactions are- civil penalty of any kind, company name registration and payment to shareholders.
a dormant company need not produce information to the house of companies once it starts trading since it already produces all the information in that year. they have to face their directors and justify their failures if they fail to produce the details of transactions. in such cases, the company may suffer severe civic penalty since its an offence.
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