What do you mean by an 'Inactive Company'?

The definition of an Inactive Company can be found in the explanation to sub-section (1) of Section 455 of the Companies Act, 2013. It reads as under: 'Inactive Company' means a company which: has not been carrying on any business or operation; or has not made any significant accounting transaction during last two financial years; or has not filed financial statements and annual returns during the last two financial years. Section 455(1) provides that where a company is formed and registered under the Companies Act, 2013 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.