Obtain Dormant Company Status explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
To obtain dormant company status, pass a special resolution (or get three-fourths shareholder consent), then file Form MSC-1 with the ROC under Section 455 of the Companies Act, 2013 with the resolution, an auditor's certificate and a statement of affairs. The ROC issues a certificate in Form MSC-2.
Overview
A dormant company is a legally alive but inactive company that either holds an asset or intellectual property for a future project or has had no significant accounting transactions. Dormant status lets promoters keep a company and its name reserved with reduced compliance instead of striking it off.
When It Is Required & Legal Basis
Section 455 of the Companies Act, 2013, read with the Companies (Miscellaneous) Rules, 2014, governs dormant status. It suits companies formed for a future project, to hold an asset or IP, or those that have had no significant accounting transaction and have not filed financial statements or annual returns for the last two financial years.
Step-by-Step Process
- Check eligibility. Confirm there are no outstanding statutory dues, unpaid deposits, unpaid loans (unless the lender consents), no pending investigation, and that the company is not listed.
- Convene a board meeting. Pass a board resolution to seek dormant status and to convene a general meeting.
- Pass a special resolution. Obtain a special resolution in general meeting, or written consent of shareholders holding at least three-fourths in value of shares.
- Obtain an auditor's certificate. Get a certificate confirming no significant accounting transactions and prepare a statement of affairs.
- File Form MSC-1. File MSC-1 with the ROC attaching the resolution, auditor's certificate, statement of affairs and consent of lenders (if any).
- Receive Form MSC-2. On approval, the ROC grants the status and issues a certificate of dormant company in Form MSC-2.
Forms, Attachments & Fees
| Form | Purpose | Timeline |
|---|---|---|
| MGT-14 | File special resolution | Within 30 days of the general meeting |
| MSC-1 | Application for dormant status | After special resolution |
| MSC-2 | Certificate issued by ROC | On approval |
| MSC-3 | Annual return of dormant company | Within 30 days of FY end |
MCA fees on MSC-1 are on the normal slab based on authorised capital, ranging from about ₹200 for the smallest companies to ₹600 for larger ones.
Timeline & Due Dates
File MGT-14 within 30 days of the special resolution, then MSC-1. Approval usually follows within a few weeks. Once dormant, file MSC-3 within 30 days of each financial year-end and hold at least one board meeting in each half of the calendar year, with a minimum gap of 90 days.
Penalty for Delay / Non-compliance
Failure to file MSC-3 or comply with dormant-company conditions can lead the ROC to strike the company off the register. A dormant company must apply to become active (via MSC-4) before undertaking business; carrying on business while dormant defeats the status and exposes the company to normal default penalties under Sections 92 and 137.
Practical Tips
- Clear all statutory dues and close any active bank transactions before applying.
- Retain at least the minimum number of directors — a company cannot remain dormant for more than five consecutive years, after which the ROC may strike it off.
- Keep the auditor's certificate current; the ROC scrutinises the "no significant transaction" claim.