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Dormant Status of Company

Dormant Status of Company

Under Section 455 of the Companies Act, 2013, a company that has been incorporated but is not carrying on any significant business or operation can apply to obtain the status of a Dormant Company.

This provision is useful for:

  • Companies formed for a future project.

  • Companies holding assets or intellectual property, but not actively trading.

  • Companies that want to remain legally in existence without having to meet the full compliance burden of an active company.

As per Rule 3 of the Companies (Miscellaneous) Rules, 2014, before applying for dormant status, a company must ensure it has no significant accounting transactions and complies with the eligibility conditions.

This allows the company to retain its legal standing while reducing compliance requirements until it becomes operational again.

Features of Dormant Company

  1. As per Section 455 of the Companies Act, 2013, a company can obtain the status of a dormant company if it has been formed for a future project or to hold an asset or intellectual property and has no significant accounting transactions.

  2. Dormant companies are required to maintain a minimum number of directors:

    • Public Company – 3 Directors

    • Private Company – 2 Directors

    • One Person Company (OPC) – 1 Director

  3. The company applying for dormant status must not have carried out any significant financial transactions in the last two years.

  4. A dormant company must file a “Return of Dormant Company” annually in Form MSC-3 to maintain its status.

  5. Dormant status helps companies avoid the burden of regular compliance requirements applicable to active companies.

  6. The Registrar of Companies (ROC) has the power to classify a company as dormant on application or even on a suo-moto basis if the company fails to file necessary returns for a long period.

  7. A dormant company can apply to become an active company again by filing Form MSC-4 with the ROC.

Documents Checklist for Application to ROC for Obtaining the Status of Dormant Company

Sr. No | Documents

  1. Copy of Board Resolution authorizing the application for obtaining the dormant status of the Company.

  2. Copy of Special Resolution passed for authorization for obtaining dormant status.

  3. Auditor’s Certificate.

  4. Statement of affairs duly certified by Chartered Accountant or Auditor(s) of the Company.

  5. Consent of the lender, if any loan is subsisting.

  6. Certificate confirming no dispute in the management or ownership.

  7. Copy of approval or No Objection Certificate (NOC) from the regulatory authority, in case the company is regulated by such authority.

Procedure for Obtaining the Dormant Status of a Company

  • Check Eligibility
    Ensure the company is eligible under Section 455 of the Companies Act, 2013 (i.e., no significant accounting transactions, no active business operations).

  • Convene a Board Meeting
    Hold a Board Meeting to discuss and approve the proposal for applying dormant status and to fix the date for a General Meeting.

  • Pass a Special Resolution
    Conduct a General Meeting and pass a Special Resolution approving the application for dormant status.

  • Obtain Auditor’s Certificate
    Get a certificate from the company’s auditor confirming that the company is eligible for dormant status.

  • File e-Form MGT-14
    File e-Form MGT-14 with the Registrar of Companies (ROC) within 30 days of passing the Special Resolution.

  • File e-Form MSC-1
    Submit e-Form MSC-1 along with the prescribed documents such as Board Resolution, Special Resolution, Auditor’s Certificate, and Statement of Affairs.

  • ROC Verification
    ROC will verify the application and attached documents.

  • Issuance of Certificate
    Upon satisfaction, the ROC will issue a certificate in Form MSC-2 granting Dormant Status to the company.

Frequently Asked Questions

A company name search ensures that your chosen business name is unique, legally compliant, and not already registered with Companies House UK. It helps you avoid legal disputes, trademark issues, and confusion in the Cardiff business market.

If your desired name is already registered, you’ll need to choose a different name or modify it. Using a taken name could result in rejection by Companies House or potential legal issues. Our experts can help you brainstorm alternative names that are compliant and market-ready.

It’s not advisable to use a name that’s too similar to another company, especially within the same industry. Similar names can confuse customers and risk trademark disputes. A company name search helps you identify these risks early.

For a company name search in Cardiff, you may need:

  • Proposed company name

  • Business entity type (Ltd, LLP, Partnership, etc.)

  • Jurisdiction (Cardiff / UK)

  • Owner or shareholder details (if applicable)

  • Business description

A “high probability” result means your proposed company name is likely to be available, but further checks are recommended. This is why our detailed Cardiff Company Name Search Report includes both identical and similar names for clarity.

Certain words are restricted under UK law (e.g., “bank,” “insurance,” “government”). If you want to use them, you’ll need special approval from regulatory bodies. We guide you through this process if your Cardiff business requires such terms