Best Practices for Dormant Company Registration with FilingHUB
Under the Companies Act, 2013, a dormant company is a registered entity that is not engaged in any significant business operations or financial activities. Many businesses establish a dormant company to hold assets, intellectual property, or plan for future projects while keeping compliance obligations minimal.
Transparent Packages
Complete Dormant Status Application.
- Board & EGM Resolutions
- CA Certification
- MGT-14 Filing
- MSC-1 Application
- MSC-2 Certificate
If your company is inactive or you wish to reduce ongoing compliance burdens, FilingHUB can guide you through the dormant company registration process with accuracy and ease, ensuring full legal compliance. Contact FilingHUB today to get started!
What is a Dormant Company?
A Dormant Company refers to a registered business entity that is temporarily inactive, meaning it does not carry out any substantial accounting transactions or business operations.
Typical reasons for obtaining dormant status include:
• Reserved for a future business project
• Maintaining assets or intellectual property
• No significant financial transactions in the current financial year
• Minimal operational activity
**Important:** Dormant status can be maintained for up to five consecutive financial years, after which the company must either become active or be wound up.
**Dormant Company Status under the Companies Act, 2013**
A company can apply for dormant status under Section 455 of the Companies Act, 2013, if it has been incorporated for purposes such as holding assets, managing intellectual property, or planning future ventures, and has not conducted significant business transactions.
**Understanding Inactive Companies**
An inactive company is one that:
• Has not conducted business activities or significant accounting transactions in the past two financial years.
• Has not filed annual returns or financial statements with the ROC for the preceding two financial years.
**Significant accounting transactions exclude:**
• Payments to ROC or other statutory requirements
• Share allotments
• Maintenance costs of company office or records
Eligibility for Dormant Company Status
Minimum Number of Directors
- Public Company: 3 directors
- Private Company: 2 directors
- One Person Company: 1 director
Shareholder Consent
- Special resolution in a general meeting
- Or written consent from at least three-fourths of shareholders (by value)
Application Conditions
- No ongoing investigations, inspections, or prosecutions
- No public deposits or defaults
- No disputes regarding management or ownership
- Clearance of all statutory dues
- Company's securities not listed on any stock exchange
- Consent from lenders for outstanding loans (if any)
Step-by-Step Dormant Status Filing Procedure
Board Meeting
Pass a board resolution approving the application for dormant status. Authorise a director to manage the process and notify shareholders for an Extraordinary General Meeting (EGM).
EGM Notice
Send a detailed EGM notice with an explanatory statement on the proposed dormant status.
CA Certification
Prepare the company's Statement of Affairs and get it certified by a Chartered Accountant or statutory auditor.
Conduct EGM
Pass a special resolution under Section 96 of the Companies Act, as per Secretarial Standard 2 (SS-2).
File MGT-14
Submit the special resolution along with EGM documents to ROC within 30 days.
Submit MSC-1 Application
Apply for dormant status via Form MSC-1 with: Board resolution and special resolution copies, Auditor's certificate, Statement of affairs, Regulatory approvals (if applicable), Lender consent (if loans exist), Latest financial statements and annual return.
Certificate of Dormant Status
ROC issues Form MSC-2, confirming dormant status.
Forms & Annual Compliance
Forms Required for Dormant Company Registration
- MGT-14 – File special resolution passed for dormant status
- MSC-1 – Application for change of company status to dormant
- MSC-2 – Issued by ROC as certificate confirming dormant status
- MSC-3 – Annual return for dormant companies
Annual Compliance for Dormant Companies
- Accounting & Financial Statements: Maintain accounts and records, Conduct bi-annual board meetings
- Statutory Audit: Audit of financial statements is required, though auditor rotation is exempted
- Tax Returns: File Income Tax, TDS, and GST returns, if applicable
- ROC Filings: File simplified annual return via Form MSC-3 within 30 days of year-end, Submit certified Board resolution and audited financial position
Simplify Dormant Company Registration with FilingHUB
At FilingHUB, we help businesses transition to dormant status smoothly and efficiently, handling: Preparation and filing of board and shareholder resolutions, Certification of financial statements, MCA form filing (MGT-14, MSC-1, MSC-3), Compliance support for tax, audit, and annual filings. Benefits: Complete compliance with the Companies Act, 2013, Reduced administrative burden, Avoidance of penalties, Professional guidance from start to finish. Ready to Convert Your Company to Dormant Status? Let FilingHUB guide you through the entire dormant company registration and compliance process, ensuring a seamless and stress-free experience.
Key Features of a Dormant Status Filing
Name Reservation
Secure your company name while preparing for future operations.
Business Restructuring
Simplify compliance while restructuring the company.
Extended Absences
Ideal if operations are temporarily halted.
MSC-1 Filing
Application for dormant status.
MSC-3 Annual Return
Simplified annual compliance.
Advantages
Business Services to help you
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