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IndianTaxPert — Simplifying Business Registration & Compliance in India | Company Incorporation • LLP Formation •
Applying for Dormant Company status is an effective way to reduce compliance obligations and save costs for companies that are currently inactive or created for future business or to hold intellectual property. A company without active operations can maintain its legal existence while minimizing compliance requirements.
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Overview of Dormant Company Status
- Professional Fee: Starting at ₹7,499/-
- Government Fee: Depends on capital (₹1,00,000 capital approx. ₹1,300)
- Processing Time: 2–3 weeks
- Eligibility: Inactive company or not conducting business in past 2 years
- No major accounting transactions & ROC annual returns not filed for past 2 years
- Process: Apply via Form MSC-1 after 75% shareholder consent through EGM (filed in MGT-14)
Benefits of Converting to Dormant Company
- Maintains legal existence of the company
- Reduced compliance requirements
- Protects company name
- Simplified annual return filing
- Auditor rotation not required
- Option to reactivate the company later
- Only two board meetings per year
- Note: Conversion does not affect liabilities or obligations incurred prior
Overview of Dormant Company Status
Professional Fee: Starting at ₹7,499/-
Government Fee: Depends on capital. For a company with ₹1,00,000 capital, the ROC fee is approx. ₹1,300/-
Processing Time: 2–3 weeks
Eligibility & Process
- Inactive company or not conducting business in the past 2 years
- No major accounting transactions
- ROC annual returns not filed for the past 2 years
- Dormant status applied through Form MSC-1 after obtaining 75% shareholder consent via a special resolution in an EGM, filed in MGT-14 with the ROC
Benefits of Converting to Dormant Company
- Maintains legal existence
- Reduced compliance requirements
- Protects company name
- Simplified annual return filing
- Auditor rotation not required
- Option to reactivate the company later
- Only two board meetings per year
Mandatory Requirements
- Legal provisions under Section 455(5) of the Companies Act, 2013 and Rule 6 of Companies (Miscellaneous) Rules, 2014
- Minimum Directors Required:
- Public Ltd.: 3 directors
- Private Ltd.: 2 directors
- One Person Company (OPC): 1 director
- Additional Conditions:
- No pending inspections or investigations
- No public deposits or outstanding loans without consent
- No management disputes or unpaid taxes
- Not listed on any stock exchange
- Companies with loans can obtain dormant status after obtaining written consent from all lenders
Stepwise Process to Convert to Dormant Company
Step 1 – Board Meeting
Pass a resolution approving the dormant status application and authorize a director for filing.
Step 2 – EGM Notice
Send notice of EGM with explanatory statement highlighting the reasons for converting to dormant status.
Step 3 – CA Certification
Get the company’s financial statement certified by a Chartered Accountant.
Step 4 – Conduct EGM
Pass a special resolution approving the conversion to dormant status with proper quorum and secretarial standards.
Step 5 – Filing MGT-14
File the special resolution with ROC within 30 days of EGM along with the certified copy and notice.
Step 6 – Application for Dormant Status (MSC-1)
Submit Form MSC-1 online with scanned documents, resolutions, shareholder consent, and CA certification.
Step 7 – ROC Approval (MSC-2)
Upon verification, ROC issues Form MSC-2, officially granting the company dormant status.
