WorkIndex/Faq Company Dormant Status
Compliance guide

Faq Company Dormant Status
India-specific preparation guide

Faq Company Dormant Status needs current-law checks, portal verification, documents and a precise brief before you compare experts on the WorkIndex work index.

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Last fact-checked: 2026-06-23
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What this page helps you decide

Faq Company Dormant Status is best handled after identifying the exact scope, period, applicable portal and documents. Use this page to prepare a sharper expert brief instead of relying on generic summaries.

  • Confirm entity type, paid-up capital, turnover, board history, shareholder approvals and due dates before starting the MCA workflow.
  • Check DSC status, director KYC, DIN details, company master data and form availability on MCA V3.
  • Separate routine annual compliance from event-based filings such as share issue, director change, charge, closure or strike-off.
  • Ask for a filing calendar, form list, attachments, certification requirement and proof of filing.
Fact check

Accuracy notes before you act

  • Startup fundraising involves VC term sheets, Shareholder Agreements (SHA), valuation reports under DCF method, and compliance with angel tax (Section 56(2)(viib)) rules.
  • DPIIT-registered startups get tax holiday benefits under Section 80-IAC and exemption from angel tax under Section 56(2)(viib).
  • Tax litigation requires filing an appeal in Form 35 before the CIT(A) within 30 days. Stay of demand typically requires paying 20% of the disputed demand.
  • Local CA firms in Bangalore localities (Koramangala, HSR Layout, Whitefield) specialize in startup incorporation, VC funding, and FEMA compliances.
Documents

Documents and facts to keep ready

  • PAN, Aadhaar, GSTIN, CIN/LLPIN, TAN or registration details where applicable.
  • Relevant financial year, assessment year, tax year, return period, due date and notice number.
  • Books, invoices, payroll, bank statements, contracts, prior filings and portal screenshots.
  • Expected output: filing, registration, correction, advisory memo, notice response, audit report or recurring compliance.
Care points

Common mistakes to avoid

  • Starting an MCA filing before checking DSC, DIN KYC, master data, board approvals and attachments.
  • Treating annual compliance and event-based ROC filings as the same assignment.
  • Using an old due date, old section number or old form without checking the live portal.
  • Posting a vague requirement without period, entity type, city, documents and deadline.
  • Comparing quotes without clarifying government fee, professional fee and exclusions.
Questions People Ask

Frequently Asked Questions

1. What is the first step for a startup to raise VC funding in India?

Startups must ensure clean corporate governance, register for DPIIT startup recognition, prepare a detailed financial model, and negotiate a non-binding Term Sheet with prospective venture capital investors.

2. What is a Term Sheet in venture capital transactions?

Tax, legal, and operational terms are negotiated here. A Term Sheet outlines the valuation, investment amount, liquidation preference, and voting rights of the VC investor.

3. What is a Shareholder Agreement (SHA) and why is it important?

An SHA is a binding contract among a company's shareholders that defines their rights, duties, board seat representation, voting rules, and restrictions on share transfers (like Right of First Refusal and Tag-Along/Drag-Along rights).

4. What is the significance of DPIIT Startup Recognition?

DPIIT recognition grants startups eligibility for significant government benefits, including tax holidays under Section 80-IAC, angel tax exemptions under Section 56(2)(viib), relaxed procurement norms, and fast-track IP filing.

5. What is the angel tax exemption under Section 56(2)(viib)?

Section 56(2)(viib) taxes share premium received by a company exceeding its Fair Market Value as 'Income from Other Sources.' DPIIT-registered startups are exempt from this tax, subject to declaring that they will not invest in specific assets like real estate or loans.

6. What is the role of a Chartered Accountant (CA) in startup fundraising?

CAs assist startups in valuation reports (e.g. using Discounted Cash Flow method as required by income tax rules), financial due diligence, tax structuring of ESOPs, and filing necessary ROC forms for share allotment (Form PAS-3).

7. How does tax litigation proceed in India, and how does it relate to Company Dormant Status?

If a taxpayer disagrees with an assessment order regarding Company Dormant Status, they must file an appeal before the Commissioner of Income Tax (Appeals) [CIT(A)] within 30 days. Subsequent appeals go to the ITAT, High Court, and Supreme Court.

8. What is the Faceless Appeal Scheme in income tax?

The Faceless Appeal Scheme allows CIT(A) appeals to be conducted electronically without physical interaction between the taxpayer and the tax officer, aiming to eliminate corruption and promote transparency.

9. What is a Stay of Demand in tax litigation?

A Stay of Demand is an application filed to defer the payment of disputed tax demands during the pendency of an appeal. Typically, the taxpayer must pay 20% of the disputed demand to get a stay from the Assessing Officer.

10. What is the penalty for under-reporting of income under Section 270A?

Under Section 270A, a penalty of 50% of the tax payable on under-reported income is levied. If under-reporting is due to misreporting of income, the penalty increases to 200% of the tax payable.

11. Where can I find top CA firms in Bangalore (Bengaluru) for Company Dormant Status?

Top CA firms are located across key business hubs in Bangalore like Koramangala, Whitefield, Indiranagar, HSR Layout, Electronic City, and Marathahalli, specializing in startup compliance, international tax, and GST for Company Dormant Status.

12. Why do startups need local CAs in Bangalore?

Local CAs understand the city's active startup ecosystem (SaaS, e-commerce, deep tech) and have direct experience with VC funding, FEMA compliances for foreign direct investments, and Karnataka Professional Tax/Shop Act registrations.

13. What is a tax audit due diligence report?

It is a report prepared by an auditor evaluating the tax compliance history, open tax disputes, and potential tax exposures of a target company before an acquisition or major funding round.

14. What is a Share Purchase Agreement (SPA)?

An SPA is the binding legal contract governing the sale and transfer of shares from existing shareholders to an investor, containing representations, warranties, and indemnification clauses.

15. Can a foreign VC invest in an Indian company directly?

Yes. Foreign venture capital investments are governed by the RBI's FEMA regulations. The transaction must be reported to the RBI on the FIRMS portal by filing a Single Master Form (SMF) within 30 days of share allotment.