A corporation is dormant if it hasn’t had any substantial accounting transactions for a period of time.

1. A substantial accounting transaction is one that the firm is required to record in its accounting records under section 386 of the Companies Act 2006 (CA 2006), but does not include the following:

2. Any transaction resulting from a subscriber to the memorandum of association taking shares in the business as a result of an obligation he made in connection with the company’s creation, or

A corporation is dormant if it hasn’t had any substantial accounting transactions for a period of time.

1. A substantial accounting transaction is one that the firm is required to record in its accounting records under section 386 of the Companies Act 2006 (CA 2006), but does not include the following:

2. Any transaction resulting from a subscriber to the memorandum of association taking shares in the business as a result of an obligation he made in connection with the company’s creation, or

Any transaction involving the payment of the following:

1. Any transaction involving the payment of the following:
2. When a company’s name is changed, a fee is paid to Companies House.
3. a fee paid to Companies House when a company is re-registered.
4. a penalty paid under CA 2006, section 453, for late submission of annual accounts, or
5. ◦ \sa charge paid to Companies House for the registration of a confirmation statement (formerly yearly return) (previously annual return)

There is a distinction to be made between a defunct company and one that is just not trading. A corporation that has been dormant for a long time will not be able to trade. Dormant Company Filing Requirement: A company that is not trading, on the other hand, is not necessarily a good company.

Investment is an ideal way to establish a company for a future project or to hold assets or intellectual property and use it later without having to make substantial accounting transactions in the case of a dormant company. The reason is cost, and a restart is better than a fresh start, and under such circumstances, dormant corporations emerge, which can be restarted without any further procedures if certain conditions are met. Regardless of whether the firm is functioning or not, it has the status of a company in society, and the longer it remains, the larger its value.

1. Before applying to an inactive firm, the following requirements must be met:
2. There shall be no prior inspection, inquiry, or investigation against the company ordered, taken up, or carried out;
3. The corporation should not have any outstanding public deposits, nor should there be any payment or interest defaults;
4. There should be no criminal charges filed against the corporation under any section of the law.
5. There shall be no arrears in the payment of laborers’ dues;
6. There are no unresolved statutory taxes, dues, or charges outstanding to the federal government, state governments, or other local governments;
7. The formalities for attaining the status of a dormant corporation were not created with the intent of deceiving creditors or defrauding anybody else.
8. It should be removed from any list of the company’s securities on any domestic or international stock exchange;
9. There should be no conflict of interest in the company’s management or ownership, and a certificate should be attached using Form MSC-1.
10. There should be no dissolved loans in the organization, whether secured or guaranteed. The corporation may apply only with the lender’s permission and the completion of Form MSC-1.

1. To summon an Extraordinary General Meeting or a Board Meeting.
2. The director is given permission to file an application with the company’s registration.
3. Send out a notice of the General Meeting.
4. Allow a chartered accountant or auditor to issue the certificate. Pass a special resolution with the approval of three-fourths of the company’s shareholders.
5. Fill out an MGT-14 e-form and submit it to the company’s registrar.

1. A public company must have a minimum of three directors, while a private company must have two directors and a one-person company must have one director.
2. To keep its inactive status, you must apply for documentation and pay an annual charge set by the legislation.
3. Cash flow figures are not required to be included in its annual accounts. A minimum of one Board of Directors meeting must be held every six months, with a minimum of ninety days between meetings.

A dormant listed company, a subsidiary of a listed company, or a dormant company that is itself a subsidiary of another corporation and is part of a group that does not meet the substantial asset test must prepare financial statements but is exempt from audit if it meets the audit exemption requirement. Under the Businesses Act, dormant companies are nevertheless required to file annual returns within one month following the AGM or within the timeframe specified. Please be advised that filing annual returns is included in our Secretarial Package.