rules on dormant company provides India Inc faster mechanism for either winding up financially stressed companies or resurrecting them within a five year time-frame because most rules and regulations of the Companies Act will not be applied on dormant companies during the duration of their dormant status.
However, in case a company retains the dormant status for more than five consecutive years, its name will be struck off the register maintained by RoC, the second set of draft rules released on Friday said.
The concept of a 'dormant company' has been included for the first time in the new company law.
A company which has not made any transactions for last two financial years has been defined as a dormant or inactive company. Such companies can now apply to the Registrar of Companies (RoC) seeking the status of a dormant company. The new draft rules paves way for around 5 lakh defunct/inactive companies to apply and get the status of a "dormant company".
Registered Valuers: This is also a new concept introduced in the Companies Act, 2013 whereby any valuation in respect of any property, stocks, shares, debentures, securities or goodwill or any other assets will need to be done by a person having certain qualifications.
The draft rules said registered valuers can be a chartered accountant, company secretary or cost accountant who is in whole-time practice or a retired member of the Indian Corporate Law Service and few more professionals like SEBI approved merchant bankers and architects among others.
The second set of draft rules cover eight chapters and clauses therein including those on prospectus and allotment of securities, management and administration, appointment and remuneration of managerial personnel, compromises, merger and amalgamations, registered valuers, National Company Law Tribunal and Appellate Tribunal, and special courts among others.
With this the corporate affairs ministry has released the draft rules for as many as 24 chapters of the new legislation. Overall, the Companies Act, 2013 has 470 sections spread across 29 chapters. The second tranche of draft rules would be open for public comments till October 19, the corporate affairs