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What is a Dormant Company?A Dormant Company is a registered business that is not carrying out any active operations or financial transactions. It remains legally recognized by the Ministry of Corporate Affairs (MCA) but is exempt from full compliance requirements that apply to active companies. 
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Why should I apply for Dormant Company Status?Applying for Dormant Status allows your company to stay registered with the MCA while you temporarily pause operations. It helps you reduce compliance costs, avoid strike-off, and retain your company name for future use. 
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Who can apply for Dormant Company Status in India?Any company that has not carried on significant financial transactions or business activity for at least two consecutive financial years can apply. It is also suitable for companies created for future projects or intellectual property ownership. 
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Which form is used to apply for Dormant Status?The company must file Form MSC-1 with the Registrar of Companies (ROC) through the MCA portal. This form includes all essential details, documents, and declarations required for Dormant Company approval. 
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Can a Dormant Company earn income or carry business?No, a Dormant Company cannot carry on any commercial activity or earn revenue. It can, however, hold assets such as property, trademarks, or patents until it becomes active again. 
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What are the main benefits of Dormant Company Status?The main benefits include reduced compliance, cost savings, retention of your company name, and protection from strike-off by the ROC. It’s ideal for companies that want to remain legally active but not operational. 
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How long can a company stay dormant?A company can remain in Dormant Status for up to five consecutive years. Before this period ends, you must either reactivate the company by filing Form MSC-4 or request an extension through ROC. 
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Is audit mandatory for a Dormant Company?No, audit is not mandatory for a Dormant Company since it has no active transactions. However, a statement of affairs certified by a Chartered Accountant must be filed along with the application. 
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What are the annual compliance requirements for a Dormant Company?Dormant Companies must file Form MSC-3 every financial year to confirm their dormancy status and ensure that no business activity has occurred. This helps maintain their active registration under MCA records. 
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Can a company with outstanding liabilities apply for Dormant Status?No. To qualify, a company must have cleared all its dues, loans, and obligations. Only companies with no outstanding liabilities can apply for Dormant Status under Section 455 of the Companies Act, 2013. 
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Can a Dormant Company own property or assets?Yes, a Dormant Company can hold property, assets, and intellectual rights such as patents or trademarks. However, it cannot actively trade or generate income using those assets. 
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What happens if a Dormant Company fails to file Form MSC-3 annually?If a Dormant Company fails to file Form MSC-3, it may lose its Dormant Status. The Registrar can mark it as “Active” or even initiate the process for strike-off, depending on the case. 
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How can I reactivate a Dormant Company?To make your Dormant Company active again, you must file Form MSC-4 with the ROC, along with required documents and a declaration from directors stating the intention to resume business. 
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Do Dormant Companies need directors?Yes, a Dormant Company must have at least two directors if it’s a private company or three directors if it’s a public company. However, no key managerial personnel appointment is mandatory. 
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Can a Dormant Company maintain a bank account?Yes, it can maintain a bank account for basic purposes such as paying government fees or other minimal transactions, but not for conducting business or revenue-related activities. 
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Can a Dormant Company issue shares or take loans?No, Dormant Companies cannot issue shares, raise capital, or take loans while they remain in Dormant Status. Doing so will be considered a significant financial activity and revoke the dormancy. 
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What are the ROC fees for Dormant Company application?ROC fees vary depending on the company’s authorized capital and jurisdiction. Generally, it is a one-time government fee plus any professional service charges for preparation and filing. 
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Is there any penalty for wrongly applying for Dormant Status?Yes. If incorrect information or false declarations are submitted, the company and its directors can face penalties under the Companies Act. It’s best to file through a professional firm like Ebizfiling. 
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Can a Dormant Company continue to hold its PAN and GST?Yes, PAN remains valid even in dormancy. However, GST registration should be surrendered if there are no taxable supplies, as a dormant entity is not engaged in active business. 
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Have any queries?If you still have questions about Dormant Company Status, our team at Ebizfiling is here to help. Reach out today for expert assistance, personalized consultation, or to get your Dormant Status application started.