Company Status – All You Must Know

Company Status is one of the most important information to verify before dealing with any company. Company Status indicates the present operational condition of a company. You can verify the status of any company as on date at MCA or any other reliable websites

Summary

  • Company status is a very important information which indicates the operational status of a company
  • Every Indian Company registered with Registrar of Companies(ROC), Government of India has one of the 14 Statuses associated with it
  • There are approximately 17 lakh companies registered in India. Out of that approx 11.25 lakh, companies are active and 5.5 lakh companies are struck off
  • You must deal only with companies with Active status and avoid dealing companies with the other statuses
  • You can check the present operational status of any company at MCA or  InstaFinancials

Company Status

A company is a legal entity, formed by a group of individuals to engage in and operate a business enterprise with common goals and objectives registered under the Companies Act. Each company has an operational status to it. The ‘Status’ of a company is an indicator of whether the company is still functioning or not.

14 possible unique statuses a company may have:

  1. Active
  2. Dormant
  3. Dormant Under Section 455
  4. Active In Progress
  5. Amalgamated
  6. Not Available for eFiling
  7. Converted to LLP
  8. Converted to LLP and Dissolved
  9. Dissolved
  10. Under Liquidation
  11. Liquidated
  12. Under Process of Striking Off
  13. Strike Off
  14. Captured

The description of all these statuses and count of companies with each status as of 28 Aug 2018 is mentioned below:

1. Active: A company is provided an ‘active’ status when it is incorporated under the Companies Act(an act that regulates incorporation, responsibilities, directors, dissolution of a company). A company retains the active status, if it keeps on trading and is regular in filing its Balance Sheets, Profit & Loss Statements, Annual Returns, conducts Annual General Meetings and adheres to other statutory rules and guidelines.

In India out of 17,06,460 companies, there are 11,25,562 companies with company status as Active

2. Dormant: A company is said to be dormant if it is not carrying on any kind of business activity or receiving any form of income. It does not have any accounting transactions during a specified period and as such remains inactive as a company. It is a great tool for keeping the assets within the company for its future use.

There is no company with company status as Dormant as on 28 Aug 18.


3. Dormant Under Section 455: A company voluntarily applies to the Registrar of Companies to obtain a status of a ‘dormant company’ or the Registrar can direct a company for the status of a Dormant company if the company has not filed its statutory filings for consecutively for the last 3 years or more. A company that is dormant does not mean it is defunct. It may be dormant as it wants to hold an asset for future and till then it was to save on the cost of compliance. When it is fit to start operating, it makes an application to the ROC and becomes ‘Active’. It can continue Dormant status by complying with minimal statutory requirements and fee. On failing to do so, the Company gets struck off by Registrar and would get a “Strike Off” status.

There are 1,463 companies which have company status as Dormant under Section 455.

4. Active In Progress: When a company wants to resume its operations, it requests Registrar of Companies through an application for getting back into action. RoC changes its status to ‘Active In Progress’ and allows 21 days to file all pending returns. On successful completion, the company gets ‘Active’ status. If it fails to complete the required formalities, it gets back ‘Dormant’ status.

There are 103 companies with company status as Active in Progress 

5. Amalgamated: This status of a company means that two or more companies have legally blended/liquidated together to form a new company. Amalgamation occurs in two ways either as a merger or as absorption. In the merger, two companies merge to form a new company, and in absorption one company purchases another company. The companies may combine for diversification of activities, expansion of services, reduction in competition and for an increase in efficiency.

There are 21,623 Companies with Company Status as Amalgamated

6. Not Available for eFiling: If a company fails to file its balance sheet and annual returns of any financial year, it is treated as a defaulting company. Such a company is not allowed to file till all the due balance sheets and annual returns are filed.

2,347 Companies in India are having Company Status as Not Available for eFiling

7. Converted to LLP: LLP means Limited liability partnership. It is a type of partnership in which some or all the partners(depending on the jurisdiction) have limited liabilities. In an LLP, each partner is not responsible or liable for another partner’s misconduct or negligence. A company that is private limited or existing unlisted public is eligible to get converted into an LLP only if all its shareholders agree to become a Partner of the proposed LLP, and there exist no charges over any of the assets of the Private Limited Company.

Companies Converted to LLP in India are 9,376 as on 28th Aug 2018.

8. Converted to LLP and Dissolved: A company (after following certain LLP Acts) gets converted to LLP, then the previous company ceases to exist only the Limited Liability Partnership Company remains to operate.

Converted to LLP and Dissolved Companies are 4,793.

9. Dissolved: A company is said to have dissolved when it has officially and formally closed its business. Here, in this case, no debt is present, and the assets and liabilities of the company can be settled within 12 months and the company is not defunct. The name of the company is then removed from the Registrar of Companies.

There are 9,438 Dissolved companies in India.

10. Under Liquidation: A company that is in the process of closing its operations. Here the assets of the company are put up for sale for paying back to the creditors. It is either a compulsive closure by Registrar Of Companies or a voluntary step taken when the company is unable to pay its due.

Presently 6,194 companies have their Company Status as Under Liquidation in India.

11. Liquidated: A company is said to be liquidated when all its assets are liquidated and it is closed or unregistered in Registrar of Companies. It is a formal insolvency procedure where assets are sold to repay its creditors. There are two ways it is liquidated, one where it is compulsory liquidation by RoC and the other is voluntary liquidation.

There are 1,122 Liquidated companies in India

12. Under Process of Striking Off: A company that is undergoing a process of striking off from the Registrar of Companies either voluntarily or by the RoC carries status ‘Under Process of Striking Off’. This company may be inoperative for various reasons or is defunct so it is getting struck off.

There are a total of 54245 companies Under the Process of Striking off.

13. Strike Off: A strike off company has legally ceased to exist. A company can get struck off by Registrar of Companies on non-compliance to statutory rules or can voluntarily apply to get struck off if it is a defunct company.

There are 5,522,41 Companies with Company Status as Strike Off

14. Captured: Only 13 companies in India have captured company status. 

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One thought on “Company Status – All You Must Know

  1. Consolidation (business) … consolidation refers to the aggregation of financial statements of a group company as … In an amalgamation, the companies which merge …

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