How long can a company remain dormant?

No maximum duration is specified. The company must file annual MSC-3 returns. The RoC may initiate strike-off if MSC-3 is not filed consistently.

What is the difference between dormant and struck-off company?

Dormant companies retain legal existence and can resume via MSC-4. Struck-off companies are removed from the register and cease to exist as legal entities.

Dormant Status Filing for Companies

Q: What is a dormant company under the Companies Act?

A company formed for a future project or holding assets with no significant accounting transactions. The RoC grants dormant status via MSC-1 with reduced compliance obligations.

Q: What is a significant accounting transaction?

Any transaction beyond RoC fee payments, legal Act compliance payments, share allotments under the Act, and registered office maintenance. Any commercial activity disqualifies dormant status.

Q: Can a dormant company hold assets or bank accounts?

Yes. It can hold assets, IP, and bank accounts for limited purposes. It cannot carry on trading, borrowing, or any commercial activity.

Reduce Compliance Burden for Inactive Companies While Preserving the Company's Legal Existence

A company that is temporarily inactive — not carrying on any significant accounting transactions — can apply to the Registrar of Companies to obtain dormant status under Section 455 of the Companies Act, 2013. A dormant company enjoys significantly reduced compliance requirements compared to an active company, while retaining its legal existence, CIN, and registered name for future use.

Dormant status is ideal for holding companies that hold assets but are not trading, SPVs that are inactive between projects, or companies incorporated for a future purpose that has been temporarily deferred. It is a middle path between remaining fully active (with all compliance obligations) and complete closure through winding up. As part of the company compliance framework, dormant companies still need to file an annual return of dormant status (Form MSC-3) each year.

Our Dormant Status Services

Eligibility Assessment

Evaluating whether the company meets the conditions for dormant status — no significant transactions, no pending litigation, no outstanding statutory dues.

Pre-Application Compliance

Clearing all pending annual filings (MGT-7, AOC-4) and other statutory dues before applying for dormant status.

Special Resolution & Board Resolution

Drafting the special resolution of shareholders and board resolution authorising the application for dormant status.

MSC-1 Application Filing

Filing Form MSC-1 (application for dormant status) with the Registrar of Companies along with all required declarations and attachments.

Annual Dormant Return (MSC-3)

Filing the annual return of dormant company (Form MSC-3) within 30 days of end of each financial year to maintain dormant status.

Restoration to Active Status

Filing Form MSC-4 when the company is ready to resume operations, restoring it to active status with the Registrar.

Conditions and Benefits of Dormant Status

Company must have no significant accounting transactions in the preceding two financial years
No pending litigation before any court, tribunal, or authority
No outstanding loans, statutory dues, taxes, or pending returns to government authorities
Dormant companies are exempt from holding board meetings (only 2 per year required, instead of 4)
No requirement to maintain or file cash flow statements as part of financial statements
Annual MSC-3 return is simpler than the full MGT-7 annual return
Company retains its name, CIN, and legal existence — can resume operations at any time by filing MSC-4

Frequently Asked Questions

What is a dormant company under the Companies Act?

Under Section 455, a dormant company is one formed and registered for a future project, or one that is holding an asset or intellectual property and has no significant accounting transactions. The RoC grants dormant status on application in Form MSC-1, and the company remains on the register with reduced compliance obligations until it is ready to become active again.

What is a "significant accounting transaction" for dormant status purposes?

The Companies Act defines a significant accounting transaction as any transaction other than payment of fees to the Registrar, payment made to fulfil legal requirements under the Companies Act, allotment of shares to fulfil requirements under the Act, and payments for the maintenance of the company's registered office. Any commercial transaction, borrowing, investment, or trading activity would disqualify the company from dormant status.

How long can a company remain in dormant status?

The Companies Act does not prescribe a maximum duration for dormant status. However, the RoC may initiate strike-off proceedings against a dormant company that fails to file its annual MSC-3 return for a consecutive period. The company must also file MSC-4 to restore active status when it intends to resume operations.

What is the difference between a dormant company and a struck-off company?

A dormant company retains its legal existence, CIN, name, and assets — it simply has reduced compliance obligations and can resume operations by filing MSC-4. A struck-off company is removed from the MCA register and ceases to exist as a legal entity. Its assets vest in the government. A dormant company is therefore the better option when future use of the company is intended.

Can a dormant company hold assets or bank accounts?

Yes. A dormant company can hold assets, intellectual property, land, or investments. It can maintain a bank account for limited purposes such as paying RoC fees and maintenance costs. What it cannot do is carry on any commercial transactions, trading, borrowing, or business activity. Holding companies and asset-holding SPVs are typical examples of entities that legitimately use dormant status.