To minimize the legal compliances, Companies, which are not operating any business activity, are applying for status of Dormant. What are the important points to be kept in mind while applying for getting status of Dorma

The following points relating to dormant companies may be noted: A dormant company shall have a minimum number of three directors in case of a public company, two directors in case of a private company and one director in case of a One Person Company. The provisions of the Companies Act, 2013 in relation to the rotation of auditors shall not apply on dormant companies. The financial statement, with respect to dormant company, may not include the cash flow statement. A Dormant Company may hold one meeting of the Board of Directors in each half of a calendar year and the gap between the two meetings is not less than ninety days, which will be treated as compliance of section 173 of the Companies Act, 2013. If a company has not obtained the status of a dormant company under section 455 or has not made any application for it and has not been carrying on any business or operation for a period of two immediately preceding financial years, the Registrar may remove the name of the company from the Register of Companies under Section 248 of the Act. [Section 248(1)] Dormant companies cannot undertake any significant financial transactions, except for payment of fees to the ROC and other normal compliances. Even as a dormant company, it must file Form MSC-3 annually, disclosing its financial position and confirming its dormant status. The company must not have any ongoing investigations, legal disputes, or outstanding dues to regulators and all financial statements and annual returns must have been filed up to date before making the application. The company should not have any outstanding liabilities, including tax dues. The company must obtain written consent from its creditors before applying for dormant status.