Dormant company: meaning, eligibility and filings
A dormant company is one formed for a future project or to hold an asset, with no significant transactions, registered under section 455 (MSC-1).
Short answer
A dormant company is a company that has been formed for a future project or to hold an asset or intellectual property and has no significant accounting transaction, or an inactive company, and that has obtained dormant status from the ROC under section 455 of the Companies Act, 2013. It applies in Form MSC-1 and enjoys reduced compliance while dormant.
- Governed by
- Section 455, Companies Act 2013
- Application
- Form MSC-1
- Annual return
- Form MSC-3
- Back to active
- Form MSC-4
Who can become dormant
An inactive company is one that has not carried on business or made any significant accounting transaction in the last two financial years, or has not filed financial statements and annual returns during those years. Significant accounting transactions exclude routine items such as paying fees to the ROC, payments to meet statutory requirements and allotment of shares to fulfil legal requirements. A company applies through a special resolution, or with notice to members, and files Form MSC-1. Companies with outstanding public deposits, loans or pending prosecution are not eligible.
Compliance while dormant
A dormant company still has obligations, but fewer than an active one. It must maintain the minimum number of directors, hold at least one board meeting in each half of the calendar year with a gap of at least 90 days, and file a return of dormant company in Form MSC-3 each year. Its auditor must certify the financial position. To resume business, it applies in Form MSC-4.
Why it matters for founders
Dormant status suits a company formed to hold a brand or IP, or to keep a name for a future venture, where closing and re-forming would be wasteful. Compare the cost of staying dormant with a strike off. If you will not need the company again, strike off is usually simpler; if you might, dormant status keeps the entity alive cheaply.
Related services
Sources
Written by the Refogo Editorial Team from the official sources above and checked on 2026-10-31. Laws, rates and due dates change, and authorities often extend deadlines, so confirm your own case with a qualified professional. This is general information, not legal or tax advice. Read our editorial policy or report an error to support@refogo.com.
Common questions
Does a dormant company need an audit?
Yes. Its financial statements and the return in MSC-3 still involve a chartered accountant's certification.
Can a dormant company open a bank account or hold property?
Yes. It can hold assets and intellectual property, and routine transactions to maintain them do not end dormant status.
How does a dormant company become active again?
By filing Form MSC-4 with the ROC, after which normal compliance resumes.