Best Practices for Dormant Company Registration

Under the Companies Act, 2013, a Dormant Company refers to a registered entity that is not actively engaged in business operations or significant financial transactions. Many companies choose dormant status to preserve their corporate identity, hold assets or intellectual property, or prepare for future ventures while reducing compliance costs.

At Taxation Point India, we assist businesses in smoothly transitioning to dormant status, ensuring all statutory requirements are met efficiently and accurately.

What is a Dormant Company?

A Dormant Company is a legal entity that remains incorporated but does not carry on substantial business activities. Common situations include:

• Company incorporated for a future project
• Entity created to hold assets or intellectual property rights
• Company remaining inactive for a prolonged period
• No significant financial transactions in a financial year

⚠️ Dormant status can be retained for a maximum of five consecutive financial years, after which the company must either become active or face compulsory strike-off.

Benefits of Dormant Status

• Preserves company name and brand identity
• Reduces compliance burden and costs
• Easy reactivation when required
• Limited applicability of Companies Act provisions
• Simplified annual return filing (Form MSC-3)
• Exempt from auditor rotation
• Fewer board meetings – one meeting every six months

Eligibility & Requirements

• Minimum Directors – Public: 3, Private: 2, OPC: 1
• Special Resolution or consent from 75% of shareholders (value-based)
• No ongoing investigations, prosecutions, or disputes
• No outstanding public deposits or secured loans
• All statutory dues and filings must be cleared
• Company securities must not be listed on any exchange

Procedure for Dormant Status Filing

• Pass a Board Resolution authorising the application
• Hold an EGM and pass Special Resolution
• Prepare Statement of Affairs certified by CA
• File Form MGT-14 with ROC
• File Form MSC-1 with required documents
• ROC issues Certificate of Dormant Status (Form MSC-2)

Annual Compliance for Dormant Companies

• Maintain accounting records and registered office
• Hold at least one board meeting every six months
• Prepare audited financial statements
• File Income Tax, TDS, and GST returns (if applicable)
• File Annual Return in Form MSC-3 within 30 days of year-end

ROC Forms for Dormant Status

• MGT-14 – Filing of Special Resolution
• MSC-1 – Application for Dormant Status
• MSC-2 – Certificate of Dormant Status
• MSC-3 – Annual Return of Dormant Company

Why Choose Taxation Point India?

• Expert guidance on eligibility and documentation
• Preparation of resolutions, notices, and filings
• Seamless ROC application and approval support
• Annual compliance management – audit, tax, and ROC filings
• Affordable, reliable, and professional compliance services

Simplify Dormant Company Registration and Compliance — partner with Taxation Point India for expert support and hassle-free ROC filing.