Imagine you start a company, give it an attractive name, get all things done, but then instead of running everyday you just let it sit like a company on holiday.
A dormant company in India is exactly the same, it’s registered and ready to go but not doing any operations and yet still registered under the Companies Act, 2013.
Here a question occurs in your mind: why open such a company when it’s not operable? The answer is this benefits various startup owners and entrepreneurs to protect their intellectual property, trademark, and business names without conducting any businesses.
So let me walk you through the registration process of a dormant company in India, with a complete step by step guide, document requirements, fee, and much more.
What is The Definition of a Dormant Company?
A dormant company is legally registered under Section 455 of India’s Companies Act, 2013 but it does not engage in any business activity such as trading, income generation, and likewise.
These dormant company formation happen to fulfill certain requirements of any businesses such as protecting brand name for future use, trademarking, or protecting intellectual property.
Here the government still makes sure that these companies file basic annual reports, like annual returns even if it’s not doing anything for the whole year.
Dormant Company Example:
Let’s understand meaning of dormant company via an real life example. Suppose you open a tech startup, complete all the important paperworks and then decide of hold-off the product launch for few years. In this mean time company does not generating any revenue but still able to keep its brand name and identity, just waiting for the right time to to launch.
These companies still need to file the mandatory compliance to stay alive and able to secure its brand identity.
What Are Some of The Benefits of a Dormant Company
Here are 7 key benefits of a dormant company in 2026 that make you understand how it’s beneficial for any entrepreneur.
1. Minimum running costs
Because a dormant company does not operate or generate income, there is minimal documentation involved. As a result, less accounting fees, administration work, and ongoing costs are involved compared to an active business.
2. Protect your business name
In fact, you can even consider this dormant company as securing your choice of company name so that no one else will be able to use it until you are ready to start trading.
3. Start trading easily at a later stage
Then when the time comes, you can activate the company quickly without having to register a new business, saving time and avoiding additional setup work in the future.
4. Barely No Tax to Pay
As the company holds no income or business activities, it stands as a company which will normally be exempt from corporation tax. This is a safe bet while developing plans.
5. Presents the business as more established
Having a company that has been in existence for a few years is much more reliable and professional in front of customers, banks, and investors when it becomes active.
6. Does Good for Planning and Future Projects
You can just prepare for some future business ideas with a dormant company, wait for funding, or just continue pausing operations without the company closing down completely.
7. Straightforward legal and filing requirements
Typically, all that needs to be done on an annual basis, and thus holding true compliance easy to manage, is the submission of rather basic documents such as a confirmation statement and dormant accounts.
Dormant Company vs Strike Off Companies
Here are 5 clear points explaining the difference between dormant companies and strike off companies.
| Dormant Company | Strike Off Company |
| The company exists but does not generate income or even trade. | The company is considered permanently closed or removed from the register. |
| They can start trading at any time if they want to. | They must form a new company to start the trading. |
| Only basic filling are required | No filling is needed as the company is considered closed. |
| The company IP is protected and can not used by others | The company name can be used by others as they close. |
| Useful when plans are paused or future business use. | Used when the business has completely ended. |
Process For Obtaining a Dormant Company Status In India
Here is the 5 simple step by step guide to get a dormant company status in India:
Step 1: Check Eligibility
Make sure the company has not carried out any business activity or operations over the past 2 financial years.
One more thing is the company should not have any pending loans, disputes or any operations such as trading, manufacturing, e.t.c.
Step 2: Hold Board Meeting
Here the directors must agree to the decision to apply for a dormant company status and must authorize one director to apply for the same.
Step 3: Pass Special Resolution
A special resolution must be passed by the shareholders. This is to get their approval to get the status of a dormant company.
This is done by holding a general meeting which includes AGM/EGM to pass the resolution.
Step 4: File Form MSC-1 with ROC
After passing the special resolution one must file Form MSC-1 with ROC (Registrar of Companies) along with required documents, resolution details, and with the approved government fee.
Document Required For Dormant Application:
- Board Resolution (confirming intent to apply for dormant status)
- Shareholder Resolution (Special Resolution passed in AGM/EGM)
- Form MSC-1 (application to ROC)
- Statement of Accounts (confirming no business in last 2 years)
- Non-Active Business Declaration (affidavit confirming no liabilities)
- Latest Financial Statements (audited)
- Bank Statement (showing no transactions)
- Director’s Declaration (confirming compliance with dormancy conditions)
Step 5: Confirmation
After the form filling, the registrar will process the application and if everything is fine then ROC will approve the application and provide your company the status of a dormant company. You will receive a certificate for the same also.
Choose Regible to Change Your Company Status as Dormant
Pick Regible Corporate Advisor LLP, consider Quick and hassle-free methods to change your company status into Dormant in India. They provide expert assistance for dormant company registration in India, covering those businesses which want to cease operations while remaining completely compliant with MCA and ROC requirements.
Regible manages the whole process from eligibility checks and board resolutions to Form MSC-1 filing. Whether you are a startup, private limited company, or an inactive business, they make it easy to change your company status to dormant, keep compliance costs low, and lock in your company name for future use-all through a trusted professional platform.
Summary
This complete guide will help you to get the gasp of dormant company in company law, why it means, why matters, benefits, dormant company registration, and many more. This blog will help your company change status as dormant and give you a smart way to reduce compliance cost while keeping your business active.
FAQs
What are dormant company accounts?
They are basic financial statements which shows the company had no trading or income benefits throughout the financial year.
Is a dormant company required to file a tax return?
A dormant company is not required to file a tax return as it has no income or taxable transactions.
What does 99999 dormant company meaning refer to?
The code 99999 is commonly used in official records to indicate that a company is designated as dormant by the company’s house.
Where can I find the list of dormant companies in India?
You can find the list via the official MCA (Ministry of corporate affairs) portal. Talk to a Dormant Company Expert
Can a dormant company be sold?
Yes they can be sold legally by transferring the ownership shares to another party or business.
How can someone restart a dormant company?
It can be started by applying through the ROC and resuming the mandatory fillings.
