Where a company is formed and registered under this Act for a future project or to hold an asset or intellectual property or if company is an inactive company, may make an application to the Registrar in such manner as may be prescribed for obtaining the status of a dormant company.

Inactive Company means:-

  • The Company has not been carrying on any business or operation during the last two or more financial years.
  • The company has not made any significant accounting transaction during the last two or more financial years.

 “significant accounting transaction” means any transaction other than—

(a) payment of fees by a company to the Registrar;

(b) payments made by it to fulfill the requirements of this Act or any other law;

(c) allotment of shares to fulfill the requirements of this Act; and

(d) payments for maintenance of its office and records.

  • The company has not filed financial statements and annual returns during the last two or more financial years.

ELIGIBILITY TO APPLY FOR DORMANT STATUS:- A  company shall be eligible to apply under this rule only, if-                 

            (i) No inspection, inquiry or investigation has been ordered or taken up or carried out  against the company;

           (ii) No prosecution has been initiated and pending against the company under any law;

          (iii) The company is neither having any public deposits which are outstanding nor the  company is in default in payment thereof or interest thereon;

         (iv) The company is not having any outstanding loan, whether secured or unsecured:

Provided that if there is any outstanding unsecured loan, the company may apply under this rule after obtaining consent of the lender and enclosing the same with Form MSC-1

          (v) There is no dispute in the management or ownership of the company and a certificate in this  regard is enclosed with Form MSC-1;

(vi) The company does not have any outstanding statutory taxes, dues, duties etc. payable to the Central Government or any State Government or local authorities etc.;

(vii) The company has not defaulted in the payment of workmen’s dues;

(viii) The securities of the company are not listed on any stock exchange within or outside     India.

        An application in form MSC-1 shall be made only after passing of special resolution in General Meeting of company and filing of form MGT-14. And registrar after consideration of application shall issue a certificate  in form MSC-2 allowing dormant status of company.

         Where the Registrar has reasonable cause to believe that any company registered as ‘dormant company’ under his jurisdiction has been functioning in any manner, directly or indirectly, he may initiate the proceedings for enquiry under section 206 of the Act and if, after giving a reasonable opportunity of being heard to the company in this regard, it is found that the company has actually been functioning, the Registrar may remove the name of such company from register of dormant companies and treat it as an active company.

  • Form MSC-3(Annual Return) :-

          After obtaining Dormant status , dormant company shall file a return indicating financial position duly audited by a chartered accountant in practice annually in E- Form No. MSC-3 along with the annual fee within thirty days from the end of each financial year.

         Provided that the company shall continue to file the return or returns of allotment and change in directors in the manner and within the time specified in the Act, whenever the company allots any security to any person or there is any change in the directors of the company.

  • Form MSC-4 (Application for seeking status of Active Company):- The dormant company may make an application to become active company in form MSC-4 .After consideration of application if registrar is satisfied the registrar will issue a certificate in MSC-5 allowing the status of an active company to the applicant.


          Provided that if the company remains as a dormant company for a period of consecutive five years, then registrar shall initiate the process for striking off name of company.

Disclaimer:- The entire contents of this document have been prepared on the basis of relevant provisions and rules and as per the information existing at the time of the preparation. Although care has been taken to ensure the accuracy, completeness and reliability of the information provided, I assume no responsibility therefore. Users of this information are expected to refer to the relevant existing provisions of applicable Laws. The user of the information agrees that the information is not a professional advice and is subject to change without notice. I assume no responsibility for the consequences of use of such information.