Company Law and Practice · Dormant Company

Application for Dormant Status and the Registrar's Role

Updated 11 October 2026 · Fact-checked

Under Section 455(1), a company formed for a future project, to hold an asset or intellectual property with no significant accounting transaction, or an inactive company, applies to the Registrar in the prescribed manner. Under Section 455(2), the Registrar considers it, allows dormant status and issues a certificate. He also keeps the register of dormant companies.

Understand Application for Dormant Status and Registrar's Role

A company can exist without doing any business. Some are formed only to hold a future project, an asset or intellectual property. Others stop working after some years. If such a company does nothing, it risks being struck off by the Registrar under Section 248. Dormant status is the lawful way to stay on the register without full compliance burden.

Section 455(1) names two kinds of applicants. The first is a company formed and registered under the Act for a future project, or to hold an asset or intellectual property, and which has no significant accounting transaction. The second is an inactive company. Either may apply to the Registrar in the prescribed manner.

The Act defines an inactive company as one that has not been carrying on any business or operation, or has made no significant accounting transaction during the last two financial years, or has not filed financial statements and annual returns during the last two financial years. Note that these are alternatives, joined by "or".

A significant accounting transaction is any transaction other than four things: payment of fees to the Registrar; payments made to meet the requirements of the Act or any other law; allotment of shares to meet the requirements of the Act; and payments for maintenance of its office and records. So routine statutory costs do not break dormancy.

The Registrar's role has three parts. He considers the application and, if he allows it, issues a certificate in the prescribed form (Section 455(2)). He maintains a register of dormant companies in the prescribed form (Section 455(3)). And where a company has not filed financial statements or annual returns for two financial years consecutively, he issues a notice and enters its name in that register (Section 455(4)). The form numbers and fees are in the rules, not the section, so mention them as prescribed.

Key rules to remember

Who may apply: Section 455(1): (future project / hold asset or IP, with no significant accounting transaction) OR inactive company; Application is made to the Registrar in the prescribed manner.
Inactive company (any one test): No business/operation OR no significant accounting transaction in last 2 financial years OR no financial statements and annual returns filed in last 2 financial years; Wording is from the Explanation to Section 455(1).
Significant accounting transaction: Any transaction other than: Registrar fees; payments to meet legal requirements; allotment of shares to meet Act requirements; office and records maintenance; Only these four are ignored when testing for dormancy.
Registrar's role: Section 455(2): allow status + issue certificate; 455(3): maintain register; 455(4): notice and entry where no filing for 2 consecutive years; Forms and fees are prescribed in the rules.

How to solve Application for Dormant Status and Registrar's Role questions

For any question on applying for dormant status, use this order. It keeps the answer in the provision, facts, conclusion format.

1State the provision: Section 455 allows a company to apply to the Registrar for dormant status.
2Identify the category: future project, holding an asset or intellectual property, or inactive company.
3Test the facts: check for a significant accounting transaction, remembering the four excluded items.
4For an inactive company, apply the two-financial-year tests (no business, no significant transaction, or no filings).
5State the process: application in the prescribed manner; the Registrar considers it, allows status and issues a certificate under Section 455(2).
6Add the Registrar's duty to keep the register of dormant companies under Section 455(3).
7Conclude clearly: eligible or not, and what follows.

Quickest way: Three-question eligibility check

When to use it: Use it for short fact-based questions on whether a company can get dormant status.

Is the company formed for a future project or to hold an asset or IP? If yes, check for significant transactions.
If not, is it inactive on any one of the three tests over the last two financial years?
Remove the four excluded payments from the list of transactions, then conclude and name the Registrar's certificate under Section 455(2).

Common mistakes in Application for Dormant Status and Registrar's Role

Saying the company applies to the Tribunal or the Central Government.
Students mix up dormant status with other approvals.
Fix: The application goes to the Registrar, who issues the certificate under Section 455(2).
Treating all three inactive tests as cumulative.
Students read the Explanation as a list of conditions to be met together.
Fix: The tests are joined by "or". Meeting any one makes the company inactive.
Counting Registrar fees or office upkeep as significant accounting transactions.
Students forget the four exclusions.
Fix: Learn the four exclusions. These payments do not defeat dormant status.
Confusing the application route with the Registrar's own notice route.
Sections 455(1) and 455(4) both lead to the register.
Fix: Under 455(1) the company applies. Under 455(4) the Registrar acts on his own after two consecutive years of no filings.
Quoting form numbers, fees or minimum director numbers as part of the section.
Students memorise rule details and attribute them to the Act.
Fix: Say these are "as prescribed". Section 455 leaves them to the rules.

Worked examples

Example 1

Nirmal Infra Ltd was incorporated to hold a patent for a future solar project. Its only payments so far are fees to the Registrar and the cost of maintaining its office and records. Can it apply for dormant status? Who decides and what is issued?

Show the solution

Provision: Section 455(1) allows a company formed for a future project or to hold an asset or intellectual property, with no significant accounting transaction, to apply to the Registrar.
Facts: Nirmal Infra was formed to hold a patent for a future project.
Transactions: Registrar fees and office and records upkeep are excluded from significant accounting transactions, so it has none.
Process: it applies to the Registrar in the prescribed manner. The Registrar considers it under Section 455(2).

Answer: Yes, it is eligible. The Registrar may allow dormant status and issue a certificate in the prescribed form, and will record it in the register of dormant companies under Section 455(3).

Example 2

Kaveri Traders Pvt Ltd carried on no business and filed no financial statements or annual returns in the last two financial years. It has not applied for dormant status. Can it apply, and what could the Registrar do otherwise?

Show the solution

Provision: Section 455(1) lets an inactive company apply for dormant status.
Test: an inactive company is one that has not carried on business, or made a significant transaction, or filed financial statements and annual returns in the last two financial years. Kaveri meets these tests.
Application: it may apply to the Registrar in the prescribed manner, and the Registrar can allow status and issue a certificate under Section 455(2).
Risk: under Section 455(4), where a company has not filed financial statements or annual returns for two financial years consecutively, the Registrar issues a notice and enters its name in the dormant register. Separately, Section 248(1)(c) allows notice of removal if a company carries on no business for two preceding years and has not applied under Section 455.

Answer: Kaveri is an inactive company and can apply under Section 455(1). If it does not, the Registrar may act under Section 455(4) or begin removal proceedings under Section 248(1)(c).

Exam tips

Write the section number first, then the category of applicant, then apply facts.
Always list the four excluded payments when a question asks about significant accounting transactions.
Say who does what: the company applies, the Registrar allows status, issues the certificate and keeps the register.
Do not quote form numbers or fees as law. Write "in the prescribed manner" unless the question supplies them.
Link to Section 248(1)(c) in an answer on why a company would apply.

Practice questions from Dormant Company

Application for Dormant Status and Registrar's Role: frequently asked questions

Who can apply for dormant company status under Section 455?

A company formed for a future project, or to hold an asset or intellectual property, with no significant accounting transaction, may apply. An inactive company may also apply. The application goes to the Registrar in the prescribed manner.

What is an inactive company?

It is a company that has not carried on any business or operation, or has made no significant accounting transaction in the last two financial years, or has not filed financial statements and annual returns in those years. Meeting any one test is enough.

What does the Registrar issue on allowing dormant status?

Under Section 455(2), after considering the application, the Registrar allows dormant status and issues a certificate in the prescribed form. He also maintains the register of dormant companies.

Do I need to remember form numbers for the exam?

The section only says the application is made in the prescribed manner. Mention form numbers only if you are sure of them from the rules. The core marks lie in the eligibility conditions and the Registrar's role.