CS Deepak Sharma
Quick Summary
Section 455 of the Companies Act, 2013 read with the Companies (Miscellaneous) Rules, 2014 Introduction In business practice, it is common for promoters to incorporate companies for future projects, asset holding structures, or strategic purposes. However, such companies may not immediately commen
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FAQ :
A Dormant Company is a company that is not carrying on any significant accounting transaction and wishes to retain its corporate existence for future use, as per Section 455 of the Companies Act, 2013.
Listed companies, companies under inspection or prosecution, companies with outstanding public deposits or statutory dues, companies with unresolved management disputes, and companies having active commercial transactions cannot apply for dormant status.
The key benefits include a significantly reduced compliance burden, regulatory clarity, flexibility to preserve corporate structures for future use, and streamlined regulatory requirements while maintaining legal existence.
The procedure involves a board meeting to approve the proposal, obtaining shareholder approval via a special resolution, filing e-Form MSC-1 with the Registrar of Companies, and upon verification, receiving a certificate in Form MSC-2.
Dormant companies must maintain minimum directors, hold at least one board meeting in each half of the calendar year, file the Return of Dormant Company (e-Form MSC-3) annually, and maintain books of account and statutory registers.
Yes, a dormant company can become active again by holding a board meeting to approve activation, filing e-Form MSC-4 with the MCA, and receiving confirmation from the MCA.
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