Home Tax & Compliance Dormant Company Registration

Dormant Company Registration

File for Dormant Company status under the Companies Act, 2013 to temporarily pause operations while retaining legal existence. We assist with board resolutions, Form MSC-1 filing, and ROC approvals. Ideal for inactive companies wanting to avoid compliance burdens. File Dormant Status with 100% accuracy and expert guidance with Kanakkupillai

1,64,739 Happy Customers

Expert Consultation

99.9% customers satisfaction guaranteed.
No Hidden charges

Dormant Status Filing in India

Many companies in India do not begin active operations immediately after registration. Some are established with long-term plans or are primarily formed to safeguard intellectual property and assets. In such situations, the extensive compliance requirements for active companies, such as regular audits, frequent filings, and detailed reporting, can become both burdensome and costly.

The dormant status of the company enables it to maintain its legal existence without staying compliant with its obligations. A company that is not engaged in significant business transactions can apply to be classified as dormant under the Companies Act 2013. This status protects its corporate identity to ensure its name and assets remain safe while alleviating the pressure of meeting ongoing statutory requirements.

What is a Dormant Company?

A dormant company is a kind of company which is registered under the Companies Act, 2013 but is not currently carrying on any significant accounting transaction or active business operations. Such companies can apply to be given a 'dormant status' under Section 455 of the Companies Act, 2013.

Legal Provision Governing Dormant Company

Section 455, read with Rule 3 to Rule 8 of the Companies (Miscellaneous) Rules, 2014, primarily governs the dormant companies in India. The Act defines a dormant company as:

“A company formed and registered under this Act for a future project or to hold an asset or intellectual property and has no significant accounting transaction.”

A significant accounting transaction is any transaction other than the following:

Payment of fees by the company to the Registrar of Companies (RoC)
Payments made to fulfill legal requirements,
Allotment of shares,
Maintenance of office and company records.

Types of Companies Eligible to File for Dormant Status

Both private and public companies can apply for dormant status, but they must fulfill the below-mentioned eligibility criteria:

1. Inactive Companies

A company is considered inactive if it has:

Not carried on any business or operation during the last two financial years; or
Not made any significant accounting transaction during the last two financial years; and
Financial statements and annual returns were not filed during the said period.

2. Companies Formed for Future Projects

Companies that are:

Incorporated for a future project or to hold an asset or intellectual property (IP), and
They do not have any significant accounting transactions and are also eligible to apply for dormant status.

These include:

Start-ups that are formed to hold IPs like patents, trademarks, copyrights, etc., until they begin commercial operations.
Special Purpose Vehicles (SPVs) are formed for infrastructure or business projects and are scheduled for future execution.

3. Companies that intend to hold assets/ UP without operations:

If a company is:

Formed solely to own an asset, brand name, or other intellectual property and
Does not engage in active business transactions,
It may also apply for dormant status.

Example: A company holding ownership of a patent or real estate property, without any regular business activities.

Which Companies Cannot Apply for Dormant Status?

Companies that have active charges registered (e.g., loans or secured borrowings).
Companies that have ongoing inspections, investigations, or legal proceedings.
Companies that have defaulted in filing financial statements or annual returns, unless such filings are made before application.
Listed companies (as they must comply with SEBI and other listing norms)

Reasons for Applying Dormant Status

There are several reasons why a company may choose to become dormant, such as:

Dormant status allows a company to maintain its legal existence without conducting any business operations.
The company can retain its directors, shareholding pattern, and constitutional documents while being dormant.
A dormant company continues to legally own its assets, such as real estate, shares, or bank accounts, while remaining inactive.
The name of a dormant company remains protected and cannot be used by any other entity during the dormant period.
Companies formed for long-term or future projects can use a dormant status to preserve their structure until they are ready to commence operations.
Applying for dormant status helps avoid the risk of the company being struck off from the register of companies by the RoC due to prolonged inactivity.
A dormant company is exempt from statutory audits and mandatory filings under the Companies Act, 2013

Conditions for Obtaining Dormant Status

Before applying for Dormant status, the following conditions must be met:

No Active Business: The company should not have been engaged in any business activity or commercial activity at the time of application.
No Significant Accounting Transactions: Except for compliance-related payments or share allotments, the company should not have undertaken any significant accounting transactions in the last two financial years
Clean Compliance Record: The company must have filed all up-to-date annual returns and financial statements before applying for dormant status.
No Investigation Pending: Under no law should an inquiry, inspection, investigation, or prosecution be pending against the company.
No Outstanding Loans: The company must not have any outstanding secured or unsecured loans or deposits. If a loan exists, it is mandatory to obtain a No Objection Certificate (NOC) from the lenders.
The company must continue to maintain a registered office address in India during the dormant period.

Procedure to File for Dormant Status in India

Step 1: Board Meeting

Conduct a board meeting to pass a resolution for applying for dormant status.

Step 2: Hold a General Meeting and Pass a Special Resolution

Issue a notice to call the shareholders of the company to call a general meeting and in the meeting, obtain the consent of at least 75% of shareholders (by value) for applying for dormant status. Make sure that you keep a certified copy of the special resolution prepared for submission later.

Step 3: File the Form MGT-14

Once the special resolution has been adopted, file the special resolution with the Registrar using Form MGT-14 within 30 days of passing the resolution.

Step 4: File the Application Form MSC-1

After filing the Form MGT-14, complete the form MSC-1 with the following details:

The CIN, registered office address, and basic company information.
Dates and references to the board and special resolutions.
Declare that since the incorporation of the company, there have been no significant accounting transactions (other than permitted transactions such as payment of statutory fees, share allotments, or maintenance of office records).

Attach the following with the form MSC-1:

Board resolution,
Special resolution,
Declaration of no significant transaction,
Auditor’s certificate (if required),
No Objection Certificate (NOC) from lenders (if any loan exists),
Statement of affairs certified by a Chartered Accountant.

Step 5: Payment of the Applicable Fee and Submission of the Application

After filling out Form MSC-1, pay the filing fee as prescribed under the Companies (Registration Offices and Fees) Rules, 2014. The cost depends on the company's authorized share capital.

Step 6: Verification by the Registrar

The RoC will review the application and the supporting documents. If the Registrar finds the submission in order and all eligibility conditions are met, they will grant a dormant status.

Post-Dormancy Compliances

Even though a dormant company is inactive, it is still required to meet a few basic compliance requirements, such as:

Filing the Annual Return using the Form MSC-3 within 30 days of the end of the financial year.
Minimum Directors:

- Private company: Minimum 2 directors
- Public company: Minimum 3 directors
- One Person Company: 1 director

No Business Activity: The company must not undertake any commercial activity.
Maintaining Registered Office: A dormant company must continue to maintain a registered office in India.
Maintaining and updating the Director KYC: DIN KYC must be done annually.

Consequences of Non-Compliance

If a dormant company fails to comply with the basic requirements:

The ROC may strike off the company’s name,
Penalties may be levied under the Act,
Directors may be disqualified,
Loss of dormant status and associated benefits.

Revival of Dormant Companies

When a company wishes to become active again and decides to resume its business activities, it needs to follow a simple revival process.

Step 1: Board Resolution

Convene a Board Meeting and pass a resolution to apply for active status.

Step 2: File Form MSC-4

Apply to the RoC using Form MSC-4, along with supporting documents, including audited financial statements if applicable.

Step 3: Certificate of Active Status

Upon approval by the RoC, a Certificate of Active Status in Form MSC-5 will be issued, restoring the company to normal operations.

Why Choose Kanakkupillai?

When you are applying for your company's dormant status, you need more than just a service provider. You need a partner who understands both the legal framework and your business strategy. We break down the process into clear, manageable steps so that you always know what’s next:

We Handle the Paperwork, End to End: Converting your company to dormant status involves numerous documents, from board resolutions to the filing of required forms. Our team manages everything to ensure that no detail is overlooked.
We Ensure Timely Filings and Full Compliance: Missing a deadline can result in penalties or even the risk of being struck off the register. We stay on top of every due date and update you at every stage.
Transparent Pricing with No Hidden Charges: What you see is what you pay; our pricing is clear, and there are no hidden charges!
Trusted by Thousands of Businesses Across India: From small startups to established enterprises, thousands of companies have relied on us for their compliance needs.