Chapter XXIX - Miscellaneous
Section 455
Section 455: dormant company
Section 455 creates the dormant company status. A company formed for a future project, or to hold an asset or intellectual property, with no significant accounting transaction, may apply to the Registrar for it. So may an inactive company. The Registrar keeps a register of dormant companies, and a dormant company can later become active again.
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This article is for general information. Refer to the Companies Act, 2013 official text for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
(1) Where a company is formed and registered under this Act for a future project or to hold an asset or intellectual property and has no significant accounting transaction, such a company or an inactive company may make an application to the Registrar in such manner as may be prescribed for obtaining the status of a dormant company. Explanation.—For the purposes of this section,—(i) “inactive company” means a company which has not been carrying on any business or operation, or has not made any significant accounting transaction during the last two financial years, or has not filed financial statements and annual returns during the last two financial years; (ii) “significant accounting transaction” means any transaction other than—(a) payment of fees by a company to the Registrar; (b) payments made by it to fulfil the requirements of this Act or any other law; (c) allotment of shares to fulfil the requirements of this Act; and (d) payments for maintenance of its office and records. (2) The Registrar on consideration of the application shall allow the status of a dormant company to the applicant and issue a certificate in such form as may be prescribed to that effect. (3) The Registrar shall maintain a register of dormant companies in such form as may be prescribed. (4) In case of a company which has not filed financial statements or annual returns for two financial years consecutively, the Registrar shall issue a notice to that company and enter the name of such company in the register maintained for dormant companies. (5) A dormant company shall have such minimum number of directors, file such documents and pay such annual fee as may be prescribed to the Registrar to retain its dormant status in the register and may become an active company on an application made in this behalf accompanied by such documents and fee as may be prescribed. (6) The Registrar shall strike off the name of a dormant company from the register of dormant companies, which has failed to comply with the requirements of this section.
Introduction
The Registrar must also issue a notice to a company that has not filed financial statements or annual returns for two consecutive financial years, and enter it in the register of dormant companies. Minimum directors, documents and annual fee for keeping dormant status are as prescribed.
Section 455 commenced on 1 April 2014 under S.O. 902(E). The India Code consolidated text shows no amendment, and the text matches the 2013 Gazette.
Key takeaways
Who can apply
A company formed for a future project or to hold an asset or intellectual property with no significant accounting transaction, or an inactive company.
Inactive company
No business or operation, or no significant accounting transaction, or no financial statements and annual returns filed, during the last two financial years.
Keep the status
A dormant company must meet the prescribed minimum directors, filings and annual fee, or the Registrar strikes it off the register of dormant companies.
Applying for dormant status
Under sub-section (1), a company formed and registered for a future project or to hold an asset or intellectual property, with no significant accounting transaction, or an inactive company, may apply to the Registrar in the prescribed manner. On considering the application, the Registrar must allow dormant status and issue a certificate in the prescribed form (sub-section (2)).
Inactive company and significant accounting transaction
An inactive company is one that has not carried on any business or operation, or has not made any significant accounting transaction, or has not filed financial statements and annual returns, during the last two financial years. A significant accounting transaction is any transaction other than: payment of fees to the Registrar; payments to fulfil the requirements of the Act or any other law; allotment of shares to fulfil the requirements of the Act; and payments for maintenance of its office and records.
Registrar-initiated entry
Under sub-section (4), if a company has not filed financial statements or annual returns for two financial years consecutively, the Registrar must issue a notice to it and enter its name in the register of dormant companies.
Keeping or leaving dormant status
A dormant company must have the prescribed minimum number of directors, file the prescribed documents and pay the prescribed annual fee to keep its status. It may become active again on an application with the prescribed documents and fee (sub-section (5)). The Registrar strikes off from the register of dormant companies any dormant company that fails to comply with the section (sub-section (6)).
Practical preparation
Check that only excluded transactions have occurred; confirm the purpose (future project, asset or intellectual property holding) or the inactive status; apply in the prescribed manner; diarise the prescribed annual filings and fee; apply to become active before resuming business.
Practical checklist
Do
- Keep the company’s transactions within the excluded categories while dormant.
- Apply for active status before resuming business.
Avoid
- Do not let annual filings lapse while dormant; failure to comply leads to strike-off from the register of dormant companies.
- Do not treat dormant status as the same as closure; the company continues to exist.
Illustrative example
Hypothetical: holding a trademark for a future launch
A group incorporates a company to own a trademark for a product it plans to launch in three years. The company only pays Registrar fees and the costs of maintaining its office.
Eligibility
It was formed to hold intellectual property and its payments fall within the excluded categories.
Application
It applies to the Registrar for dormant status in the prescribed manner and receives a certificate.
Reactivation
Before the launch, it applies with the prescribed documents and fee to become active.
Outcome
- While dormant, it must keep up the prescribed filings and fee, or it will be struck off the register of dormant companies.
Glossary
- Dormant company
- A company granted dormant status by the Registrar and entered in the register of dormant companies under section 455.
- Significant accounting transaction
- Any transaction other than the four kinds listed in the Explanation: Registrar fees, payments to meet legal requirements, allotments to meet the Act’s requirements, and office and records maintenance.
Frequently asked questions
Can a company holding only intellectual property become dormant?
Yes, if it was formed and registered to hold an asset or intellectual property and has no significant accounting transaction.
Can the Registrar make a company dormant without an application?
Under sub-section (4), if the company has not filed financial statements or annual returns for two financial years consecutively, the Registrar must issue a notice and enter it in the register of dormant companies.
How does a dormant company become active?
By an application accompanied by the prescribed documents and fee under sub-section (5).
Need help applying this provision to your situation?
Contact BizeneedLast updated 11 October 2026