Distinguish between 'defunct company' and 'dormant company'.

In accordance with Section 455 of the Companies Act, 2013, Dormant Company is one which has obtained such status in a certificate from the Registrar of Companies. It is an inactive company which has not been carrying on any business or operation, or has not made any significant accounting transaction during the last two financial years, or has not filed financial statements and annual returns during the last two financial years. The application may be made to the ROC for obtaining the status of a dormant company in form MSC-1. The Registrar may send notice to a company which has not filed financial statements or annual returns for two financial years consecutively, and enter the name of the company in Register of dormant companies. A company, once identified as dormant, will need to maintain only a minimum number of directors and pay some annual fees as prescribed in the Companies (Registration Offices and Fees) Rules, 2014 to retain its dormant status and may become active company on making an application accompanied by prescribed documents and fees. Defunct company has been mentioned in section 560 of the Companies Act, 1956. Defunct company is a company which is not operating or functioning; not carrying on any business or in operation. Generally, it is evident from the latest available balance sheet of a company, if a company is not filing its balance sheet for many years then also the concerned ROC has reasonable cause to believe that the company is not in operation. It is a company without any assets or liabilities. It has paid up capital / reserves on the left hand side of Balance sheet and losses on the right hand side. As per section 560 of the Companies Act 1956, Any defunct company desirous to strike off its name from the register of Registrar of company can apply in Form FTE for strike off its name from the register maintained by ROC as per Guidelines for 'FAST TRACK EXIT MODE' issued vide General Circular No. 36/2011 dated 07.06.2011. For the purpose of applying for the FTE scheme, a defunct company means a company which has: Nil asset and nil liability, and Not commenced any business or activity since incorporation or Not been carrying any business operation since last one year before making an application under Fast Track Exit Scheme.