Dormant Company Status
Park an inactive company in dormant status to cut its compliance load while keeping the name alive.
A company that is not trading has two sensible options: close it, or make it dormant. Dormant status under Section 455 of the Companies Act lets you keep the entity and its name alive while cutting the compliance load substantially.
It suits a company formed for a future project, one holding an asset or an intellectual property right, or one whose business is paused rather than finished. What it does not do is remove compliance entirely — a dormant company still files, just less.
What this costs
Basic
₹6,639 plus GST
- Filed with the Registrar, with the dormancy letter handed to you
Which companies qualify
- A company formed for a future project, or to hold an asset or intellectual property
- A company with no significant accounting transaction in the preceding period
- A company that has not filed financial statements or annual returns for two consecutive years may be classified dormant by the Registrar
- All statutory dues must be paid and filings up to date before applying
- No inspection, inquiry or investigation may be pending
- No outstanding public deposits, unpaid loans or unsatisfied charges
What counts as a significant transaction
The definition matters, because a single ordinary payment can defeat dormancy. Payments of fees to the Registrar, payments to fulfil statutory requirements, and allotment of shares to subscribers are all excluded from the count.
Anything else — a sale, a purchase, salary, rent, interest on a loan — is a significant accounting transaction and is inconsistent with dormant status. A company that needs to keep paying rent cannot be dormant.
What a dormant company still has to do
- File Form MSC-3, the annual return of dormant status, within thirty days of the financial year end
- Maintain the minimum number of directors
- Hold at least the reduced number of board meetings the Act requires
- Keep its books of account and statutory registers
- File its income tax return each year
- Continue director KYC filings
Coming back
A dormant company returns to active status by filing Form MSC-4 with a return of the transactions it proposes to undertake. Normal compliance resumes from that point.
Dormant status can be held for a maximum of five consecutive years. Beyond that, the Registrar may strike the company off, so it is a pause rather than an indefinite parking space.
How we handle it
- 1 Checking eligibility We confirm the company qualifies and that filings and dues are current, since the Registrar will not entertain an application otherwise.
- 2 Approvals The board approves and a special resolution is passed, or consent obtained from three-fourths in value of the shareholders.
- 3 Statement of affairs The statement of affairs is prepared and certified by the auditor.
- 4 Filing MSC-1 The application for dormant status is filed with the supporting documents.
- 5 Certificate The Registrar issues the certificate of dormant status in Form MSC-2.
- 6 Ongoing filing We set up the annual MSC-3 filing so dormancy is maintained properly.
Frequently asked questions
Does a dormant company file anything?
Yes, but much less. Form MSC-3 annually, the income tax return, director KYC, and the minimum board meetings. It is a reduced load, not an exemption.
How long can a company stay dormant?
A maximum of five consecutive years. Beyond that the Registrar may strike it off, so dormancy is a pause rather than a permanent arrangement.
Can a dormant company have a bank account?
It can hold one, but transactions through it would generally be significant accounting transactions inconsistent with dormancy. In practice the account stays inactive.
Should I choose dormancy or strike off?
Dormancy where you want to preserve the name, an asset or a future project. Strike off where the company has served its purpose and you do not expect to revive it.
How do we start trading again?
File Form MSC-4 with a return of the proposed transactions. Normal company compliance resumes from that point.
What is not included. Government fees, statutory charges, stamp duty, court and registry fees, digital signature costs and any third-party professional charges are separate and payable at actuals. GST applies on professional fees where indicated. Prices shown are indicative and may change without notice; we confirm the total in writing before any work begins — see our terms on pricing.
Talk to us about Dormant Company Status
Share your requirement and our team will confirm the documents needed, the exact charges and a realistic timeline — usually the same working day.
- Expert document checking before submission
- Regular status updates on WhatsApp
- Transparent professional charges
- Assistance in Marathi & English
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