Dormant Company Status (MSC-1): The Legal Pause Button (2026)

Who qualifies for dormant status — and who is barred

• A company formed for a future project or to hold an asset or intellectual property, with no significant accounting transaction since incorporation.
• An "inactive company" — one that has not carried on business or operations, made a significant accounting transaction, or filed its financial statements and annual return, for the last two financial years.
• "Significant accounting transaction" excludes fees paid to the Registrar, payments made to comply with any law, share allotments to meet a statutory requirement, and payments for maintaining the office or records.
• Barred from applying: companies under inspection, inquiry, investigation or pending prosecution; companies with outstanding public deposits or a default on repaying one; companies with any outstanding secured loan; companies with a management or ownership dispute (unless a no-dispute consent is attached); companies with outstanding statutory dues or unpaid workmen’s dues; and any company with securities listed on a stock exchange.
• An outstanding unsecured loan does not disqualify a company by itself — attach the lender’s written consent to the MSC-1 application.

Documents required for MSC-1

• Certified copies of the board resolution and the special resolution — or, where the 75% consent route is used, the shareholder consent letters.
• Auditor’s certificate and a statement of affairs certified by a chartered accountant.
• Latest financial statements and annual return, if any were filed.
• A no-objection certificate from the sectoral regulator, if the company is regulated (RBI, SEBI, IRDAI and so on).
• The lender’s written consent, where an unsecured loan is outstanding, and a declaration that there is no dispute in management or ownership.
• MSC-1 needs certification by a practising CA, CS or cost accountant.

What MSC-1 costs

MGT-14 — filing the special resolution that authorises the MSC-1 application — carries the standard authorised-capital fee slab, with the usual additional-fee ladder if filed late:

MSC-1 itself carries a separate government fee that the MCA V3 portal computes from the company’s authorised capital at the time of filing — confirm the exact figure there rather than from a fixed table. Under CCFS-2026 (till 31 August 2026), that MSC-1 fee is cut by 50%.

How to file MSC-1 on MCA V3

• Hold a board meeting to approve applying for dormant status and to call a general meeting or circulate consent letters.
• Get member approval — a special resolution in general meeting, or written consent from at least 75% of shareholders.
• File MGT-14 for the special resolution (if used) within 30 days of the resolution.
• Prepare the CA-certified statement of affairs, the auditor’s certificate, and any NOC or lender consent the company needs.
• File e-Form MSC-1 on MCA V3 within 30 days of the resolution or consent — generate the SRN, download the PDF, affix a Class-3 DSC, and re-upload it within 15 days of SRN generation.
• Pay the fee within 7 days of the DSC upload (or the due date plus 2 days, whichever is earlier); pay the concessional rate if filing inside the CCFS-2026 window.
• MSC-1 is typically processed as straight-through; on approval the ROC issues Form MSC-2 and updates the company’s master data to "Dormant under section 455."

Staying dormant, filing MSC-3, and coming back with MSC-4

• A dormant company files Form MSC-3 — the return of dormant company, with an audited statement of financial position — within 30 days of each financial year-end.
• While dormant it must still hold at least one board meeting every half-calendar-year, with a gap of not less than 90 days between the two, and keep its minimum number of directors in place.
• Dormant status runs for a maximum of 5 consecutive financial years. To come back, the company files Form MSC-4; the ROC then issues Form MSC-5 confirming active status again.
• Dormancy is not an audit exemption — auditor rotation under section 139(2) doesn’t apply, but the statement of affairs still needs a chartered accountant’s audit each year for MSC-3.
• If a dormant company doesn’t keep up MSC-3 or the board-meeting rule, section 455(6) lets the Registrar strike its name off the register of dormant companies — the Act does not spell out a separate rupee fine tied to section 455 itself.