A group of persons wants to form a company for a future project and acquire the status of a 'dormant company'. The group seeks your advice about the procedure and the conditions to be complied with. State the privileges

As per section 455 (1) of Companies Act, 2013, 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. The Registrar on consideration of the application shall allow the status of a dormant company to the applicant and issue a certificate in form MSC-1. Further a dormant company shall have minimum number of three directors in case of public company, two directors in case of private company and one director in case of One Person company. The dormant company shall have to file a Return of Dormant Company annually, inter alia, indicating financial position duly by a chartered accountant in practice along with prescribed annual fee within thirty days from the end of each financial year. Privileges of a Dormant Company The privileges and exemptions enjoyed by a dormant company or its advantages over other companies are as follows: Section Nature of exemptions/privileges 2(40) The financial statement, with respect to a dormant company, may not include the cash flow statement; 173 (5) It is required to hold at least one meeting of the Board of Directors in each half of a calendar year and the gap between the two meetings should not be less than ninety days. As per Rule 7 of Companies (Miscellaneous) Rule 2014 a dormant company is required to file return of dormant company in Form MSC-3.